Unemployment insurance in USA

Unemployment insurance in USA is managed by the states through the state trust funds. Here is a glimpse of what is happening.

..... spending on unemployment benefits fell by 24%, as fewer claims were filed and a temporary $25 weekly increase in benefits expired.
At the same time, businesses paid $12 billion more in unemployment insurance taxes in 2011. Many states have raised unemployment taxes on companies to replenish their depleted UI trust funds.

My view: An alternative to unemployment insurance is for the state to offer a low cost interest loan to unemployed people. They have to pay back the loan, but it will be at a low interest rate (and not the high rate of interest charged by the banks). Some of the loans will have to be written off, but a large part can be recovered from the lenders when they find their jobs in an economic recovery, or when they sell off their house in the future.