The unemployment insurance system is expensive and fails to create the right incentives. It's easy for people who don't need it to collect and lie on "looking for work" statements without seriously pursuing a job. It only exists for a short time period that is not taylored to individual circumstances.

Solution: Replace unemployment insurance with unemployment loans that must be repaid.

My second idea.

[ What do you do when people default? Put them in jail, i guess? Of course, that's 10 times as expensive as just giving them money, so that's not gonna work. I think the biggest problem with this is that the people who are likely to care about the difference between a loan and the current system aren't the ones gaming the system now. Those that are gaming the system, who have very little to lose probably, won't care about any penalty cheap enough to be applicable here.

I don't deny that some effort needs to be made to reduce cheating, but I'm playing devils advocate, i guess, to draw out more detail on this plan. -k]

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