WASHINGTON - January 4, 2010 - One aspect of the current economic collapse that has not been widely reported is the extreme difficulty that most state unemployment insurance funds are facing. At this point, 25 state unemployment insurance funds have gone broke and the Department of Labor estimates that 15 more state unemployment funds will likely go broke within two years and need massive loans from the federal government just to keep going.

So how bad are things out there?

Indiana state Representative David Niezgodski was recently very blunt about the status of Indiana's unemployment program.

"Our system was absolutely broke."

State unemployment funds are generally separate from the general budgets of most states. When these funds do go broke, usually there are two solutions that are considered. Either unemployment benefits are cut or payroll taxes are increased.

But now many states have resorted to borrowing billions upon billions of dollars from the federal government to keep their programs going. In fact, states have borrowed a total of 24 billion dollars from the federal government up to this point.

But there is a huge problem.

Unemployment is not going away any time soon.