-- 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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The “stuck paying” comment reflects an extraordinary lack of comprehension of debt instruments. Construction bonds, utility bonds ,,,ad nauseum, exist because of a mismatch between cash flow and reasonable spending needs. Would he suggest that LasVegas stiff all the bond holders because some of the cash flow from the bond issue went to fund pensions? Bad decisions and/or current day recognition of bad decisions doesn’t change the financial commitment the issuer made. “Stop electing fools” or “live within your means” would be better suggestions.