-- Connecting the dots between our economy, government and business --
Summary and audio linked here.
Chicago’s political leadership is floating a pension buyout program as evidence it is seriously addressing the city’s thirty-six-billion-dollar unfunded pension liability, but Mark Glennon, founder of the Illinois policy research organization Wirepoints, said that the proposal moves debt from one column to another rather than reducing it, and that the broader fiscal picture facing the city continues to deteriorate across every measurable dimension. Audio here.
Expect no retraction or apology. This what they do.
The state’s existing buyout program for its own pensions is the precedent for Chicago, which should be a warning: Look out for similar exaggerated claims and shoddy analysis.
Full interview and summary linked here.
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Other states I have lived in, Va, NC, OH, do NOT operate like this – full transparency with accounting, and followup tracking. The records show IL essentially ‘wings it’ based on politics, i.e. blank check legislation. It’s stunning how no one in IL government is at least embarrased by the ‘shoe box’ process of spending. It’s near impossible to control- I guess that was the idea.
While inflation continues to run, pensions will be paid in devalued dollars. This will lead to calls for COLA increases which seem likely to make things worse if legislators cave. During the last great depression bankruptcies of municipalities reached an all-time high, however, so eventually we may have that to look forward to! Once deflation replaces inflation, the Fat Egg will fall off the wall and they won’t be able to put anything together again.
They are making a pretty big assumption that future generations will want to stay in IL.