November 2025 ADP jobs report minus 32,000

[7426k]

@Gaius

That’s correct. This is what I am saying. That’s the point of the conversation.
Unemployment Insurance is called insurance, but it is not insurance; it is pay-as-you-go.

If it’s pay-go why are excess funds invested in a fund? And why would a private-sector firm be jailed for creating such a thing?

What do you call a program that pools risk for an event that is rare, unpredictable for the individual and predictable in aggregate, then makes the pool participants whole in cases of the event happening? Most people call that insurance.

[Gaius]

@7426k

If it’s pay-go why are excess funds invested in a fund? And why would a private-sector firm be jailed for creating such a thing?

They are not invested in a fund on any real sense.
They following descritpion is above and beyond the insolviencies and problems listed by DOL and GAO above.

Insurance company (and bank)

• take in funds, and invest them in resalable assets
• those assets do now and under all normal assumptions can and -->will<-- be resold
• their resale value on day 1, and day 100 and day 10,000 will, under all normal assumptions be in excess of what it would take to pay claims.

Unemployment (ahem) “insurance” (cough cough)

• take in funds and lend it to Congress receivng only “special series” bonds that cannot be sold nor transferred. They are nothing more whatsoever than a promise “We get the stuff and out kids will pay back this money one day.”
• The “investments” are like buying so many peanut butter sandwiches. They retain nothing, no value. They are nothing more than promises "future taxayers (our kids) will have to pay these notes."
• the fact that the money changes hands from state insurance commison to the federal government changes nothing. Never at any point do these (ahem) “investments” retain any salabilty or value the way bona fide investments do.

[7426k]

@Gaius

They are not invested in a fund on any real sense.
They following descritpion is above and beyond the insolviencies and problems listed by DOL and GAO above.

Treasuries are not an investment in a “real sense”? This will shock every pension and hedge fund.

Your defining “normal terms” as all those times when it works. It fails all.the.time. Even in cases where insurers carry reinsurance.

@Gaius

take in funds and lend it to Congress receivng only “special series” bonds that cannot be sold nor transferred. They are nothing more whatsoever than a promise “We get the stuff and out kids will pay back this money one day.”

That is literally every nontransferable bond that has ever been issued.

What would you call a program - public or private - that pools risk for an event that is rare, unpredictable for the individual and predictable in aggregate, then makes the pool participants whole in cases of the event happening? Most people call that insurance.

[Gaius]

@7426k

Treasuries are not an investment in a “real sense”? This will shock every pension and hedge fund.

Depends.

THING 1:

• You or a company buys open market bonds. They are a real investment to you or to the company. (Note those treauries are not “special series” treasuries)
• Because they are not “special series” treasuries, they can be bought or sold or transferred any time to anyone.

THING 2:

• State gov’t takes in $1,000
• State gov’t transfers that $1,000 to the Federal Gov’t
• The federal government uses the $1,000 to buy (the equivalent of) peanut butter sandwiches for the poor.
• Federal government gives State government nothing nithing nothing nothing but a piece of paper promising future taxpayers will pay back that $1,000 with interest

Thing 1 and Thing 2 are so wholly and completely different, it’s wrong to say they are the same.

This statement is also whilly and completely different from the above statements wherein the DOL and the GAO revealed that most UI trust funds are laughably under-funded, and thus would not qualify only as fraud and not as “insurance” if done by not-the-government.

[7426k]

@Gaius

The federal government uses the $1,000 to buy (the equivalent of) peanut butter sandwiches for the poor.

no, the federal government does not do anything equivalent to this, at all.

What would you call a program - public or private - that pools risk for an event that is rare, unpredictable for the individual and predictable in aggregate, then makes the pool participants whole in cases of the event happening? Most people call that insurance.

When you go to a bank and deposit money, do you worry that you will get nothing, nothing, nothing back but a piece of paper promising future depositors will pay you back?

[Gaius]

I amnnotdenyign that there is some aspect of pooled risk both real insuran e and in UI

I am saying that Unemployemnt insurance is NOT like real insurance
because . . . .

• Legally [nsurance companies must do certian things with the money they recieve and must maintain certain balances.
• UI does not do that does not even come close to doing that.
• any private insurance company who insted does what UI does woud be declared a fraud and the perpetrators would be jailed (two sets of laws.)

None of that declares “this one involves pooled risj and the other one does not.”

[7426k]

.

@Gaius

Legally insurance companies must do certian things with the money they recieve and must maintain certain balances.

Kinda. But they fail all the time. Ditto, UI programs must do certain things with the money they receive.

What is it you think UI does that would be declared fraud?

[Gaius]

Well it’s easy to see if we consider the State and Fed’l governments together.
Let’s lump them together and call them “the government.”

Legal:

• Private company sells you insurance, collects $100, invests the $100 in a thing that can be resold, is likely to keep its value, and likely to appreciate.
• Future claims will be paid out fo that investment.

Illegal Fraud:

• Private company sell you “insurance” (wink, wink, nudge, nudge) spends that money on the investment equivalent of peanut butter sandwiches
• Future claims will be paid out of future inflows from future customers.

Government:

• Same as above but change the final word from “customers” to “taxpayers.”

If the government wants to live by the same laws they put on us lowly little non-government untermenschen and peons, the money to take would be invested in… I dunno, put 0.5% into each of 200 conservative mutual funds, REITs, ETFs, corporate bond funds, metals funds, gov bond funds, etc.

[7426k]

@Gaius

Same as above but change the final word from “customers” to “taxpayers.”

If the “legal” above works, why do we have re-insurers? Because both the insurer and the insured face unmeasurable risk. The insurer realizes that it might not be able to cover its expenses and hedges that with a re-insurance policy. If both those fail the government steps in to make people whole.

The UI system works the same way. The Fed is the reinsurer for catastrophic loss. Same as above.
That you disagree with the investment allocation is immaterial.

Do you believe coverage for flooding is insurance?

[Gaius]

@7426k

If the “legal” above works, why do we have re-insurers? Because both the insurer and the insured face unmeasurable risk. The insurer realizes that it might not be able to cover its expenses and hedges that with a re-insurance policy. If both those fail the government steps in to make people whole.

That part is correct.

@7426k

The UI system works the same way. The Fed is the reinsurer for catastrophic loss. Same as above.
That you disagree with the investment allocation is immaterial.

That part is not correct. I disagree wiht the entire premise.

1.) Only 13 states have a UI trust fund that the DOL (the Biden DOL) considers “solvent” by any means.

2.) Our two largest most populous states have ZERO in their trust funds.

3.) The standard above is based on faulty accounting, transferring funds from one level of gov’t to another -->WITHOUT REGARD TO THE FINAL DISPOSITION OF THE FUNDS<-- and treating that final transfer as an "investment’

.
.
.
You lend $200 to your wife.
Your wife then takes you out to a $200 dinner.
Has your family made a $200 investment? Are you $2000 better off? Are you $200 more solid?

A corporate subsidiary lends $1,000 to its parent company.
The parent company then spent its time at a Christmas party.
Are the stockholders now $1,000 better off? Are they $1,000 more solid?

[Smyrna]

@tnt

Isn’t falling demand for energy often a signal of a softening economy?

Hopefully it’s a reflection of illegals being deported.

[7426k]

The federal government is the reinsurer. They are not the same entity. They are the catastrophic plan for unemployment. The rest of this is just denying the obvious: that insurers, public and private,
Function similarly and can sometimes become insolvent but for the reinsurer.

[tnt]

@Smyrna

@tnt

Isn’t falling demand for energy often a signal of a softening economy?

Hopefully it’s a reflection of illegals being deported.

I don’t think we’ve deported enough people to result in a blip in energy demand.

[Smyrna]

@tnt

I don’t think we’ve deported enough people to result in a blip in energy demand.

Think positive.

[Gaius]

You lend $100 to a family member
who then uses it to take you both out to dinner.
Is the money invested?
*
*
*

You lend $100 to an entity (at 1%)
who invests it in stocks, commodities etc. at 4% and funds itself out the 3% difference.
*
*
*

Do not pretend you cannot see the difference.

[7426k]

Why are you talking about family members? That analogy is akin to saying reinsurers are under the same corporate entity as issuers. It’s patently false.

[Gaius]

I belive we are talking about The state and federal government
two closely related entities and. . . . . the re-insurer analogy also falls apart because SUTA and FUTA are one anyway.

Very very differnt when state farm insurse something and Lloyds of London finds 50,000 different re-insurers to re-insure 20% of it.

[7426k]

We’ve reached the endpoint here. If one starts from the premise that all government programs are fraudulent ponzi schemes it’s easy to create enough analogies to convince yourself that all government programs are ponzi schemes, even ones that are actually insurance programs.

I presume you believe flood insurance is a ponzi scheme, right?

[Gaius]

We may have reached and endpoint,
but “all government programs are ponzi schemes” is not my premise.

I have been stating that UI is not real insurance
and thatif a private secotr actor didthe same, the contract might be legal,
but calling it “insurance” would be an act of jailable fraud.

I believe I have made my poitn convincingly and you are now left searching for strawmen to defeat.

I said:
“UI is not real insurance.”

That is differnt from saying:
“All government programs are ponzi schemes.”

[7426k]

@Gaius

We may have reached and endpoint,
but “all government programs are ponzi schemes” is not my premise.

I have been stating that UI is not real insurance
and thatif a private secotr actor didthe same, the contract might be legal,
but calling it “insurance” would be an act of jailable fraud.

It is not jailable fraud. It is in fact the public sector equivalent of an insurance fund with a dedicated re-insurer. That dedicated re-insured happens to have a 100% payment record and not a single default.

You have started from a false premise and created strawmen to prove said premise.