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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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Who is loaning the city all this money? I would love to know the banks or funding houses that see this as a profit opportunity, if only to keep my own investments as far away from them as possible!
News flash to folks outside of IL – IL Democrats do NOT care about debt.
News flash…neither does the federal government run by republicans or democrats.
And what does that have to do with IL pension debt? Trying to deflect, again.
I think the point is that very few, if any politicians care about the fiscal health of their city/state/country. Power is the main driver of their interest. It’s not a problem unique to Democrats, although the IL political machine seems to have perfected financial incompetency.
The article is about CHICAGO yet you wrote about Illinois Democrats not caring about debt. Were you deflecting when you wrote about Illinois even though the article is about Chicago? That’s basically the childish logic that you are putting forth. Not to mention completely inaccurate per usual. Both Republicans and Democrats in Illinois don’t seem to care about debt. The latest example is the unanimous support for the tier 2 pensions being bumped to tier 1. I guess all those republicans in Illinois are fiscal hawks even though they voted for the exact same thing as Dems.
The article is about Illinois.
The article is based on Chicago. My comment was a response to a biased assessment of the political feelings around debt.
Wrong, it is based on Illinois. There are three words above, they say Read the Article. It serves a dual purpose, it is a link to the article AND it is what you should do. The article clearly talks about Pritzker, who is the governor of ILLINOIS, signing a bill into law that was voted on by both the Senate and the House chambers of ILLINOIS. The comment you were speaking of is directed to those not in Illinois, ie people who live in other states and not anything to do with the Federal level. Finally, Tier 2 was not… Read more »
As Metallica has said, sad but true.
Realistically, at this point, there is absolutely nothing you can do. If you stayed in Illinois for whatever reason, you should know what is coming from your leadership. They will scream and screech and throw tantrums, blame Trump, blame Republicans and then offer some bizarre apology and say pony up. And you will be given no choice but to pony up. If you still think that somehow, someway they will figure a way out of this, stop deluding yourselves. Even if Ted Dabrowski gets elected he will still likely have a democrat general assembly and the city that owns the… Read more »
And yet the complaining continues non-stop.
PPF (Pensions Paid First), so you are supportive of the long term fiscal malfeasance of the democrats who run the city, county and state? Why? Curious to hear your thoughts on Pritzker.
No, not at all. I’ve been the one advocating paying the actuarial pension contributions while others keep dreaming of some fantasy cut that will never take place at the state level and maybe only slight relief someday to city pensions through some type of restructuring. I see massive spending cuts and tax increases no different than the New York City fiscal crisis of 1975. People love the “drop dead” soundbite on the cover of a newspaper but completely gloss over what actually happened.
I think they should double taxes. That way everyone but you would move out of the state.
Until the government, Chicago or IL, addresses the pension crisis, the loss of residents, and the loss of business, both of which are the tax base for the pensions, then complaining will continue. The problem is solvable, but will be unpopular among the union class that keeps voting in the “leadership.”
Agree that the problem is solvable. It just won’t be popular among those taxpayers paying more money in taxes each and every year. Even if the courts ever offered some slight adjustments to city of Chicago pensions, taxes will need to start increasing and other massive spending cuts will need to take place. The real complaining hasn’t even started yet.
A city/state can’t survive as you suggest. People of means will move their home address – I’ve already moved mine out of Chicago until I can move out of IL. Additionally, states that tax excessively don’t attract business w/o also giving tax cuts. I know it sounds simple – “cut spending, increase taxes” – but Chicago/IL already have one of the highest tax burdens, the population is decreasing, and businesses are not coming to the area to spur the economy. Eventually, the pensions will be bankrupt. For most Illinoisans, that will be OK.
I agree they can’t survive long term with out of control spending but taxes will go higher and massive spending cuts will most likely take place. Perhaps you’ll get pensions to take a small haircut but that won’t be easy. The pension’s going “bankrupt” won’t stop the city from owing the debt. They would need to get some type of relief from the courts.
That’s why I tell people to look at the New York City fiscal problems of the 70’s for the blueprint. Pensions weren’t cut but large tax increases and massive spending cuts took place.
While the pension funding problem is theoretically “solvable” through spending cuts and tax increases I don’t believe it’s politically solvable. The amount of budget cuts and tax increases needed to make the pensions whole could not be made by any politician or group of politicians who hope to remain in office or get elected to office. For the reforms to be enacted the city of Chicago needs to become insolvent and not have access to the credit markets like New York City in 1975. The latest actuarial projections I’ve seen would have Chicago paying $500 million more per year to… Read more »
The stock market is at nosebleed levels, and the pensions are broke. This is what: “I’ll be dead buy than”; looks like. The scheme has played out to it’s logical conclusion.
How soon until charges of racism are hysterically directed at the bond buyers demanding higher rates to compensate for the malfeasance of every Illinois and Chicago politician?
You know it’s coming.
Stop digging, Chicago Bankruptcy NOW!
Chicago bond penalty widens as Johnson weighs how to close deficit By Shruti Date Singh, Bloomberg Investors are demanding higher premiums to buy Chicago muni bonds as Mayor Brandon Johnson wades through a myriad of options to close a deficit that tops $1 billion for the year ahead. Spreads on several tax-exempt Chicago bonds that were the most-actively-traded this week have widened recently, according to trading data compiled by Bloomberg. For debt due in 2042, the spread above benchmark muni securities jumped to 1.54 percentage points on Thursday, up from 1.17 percentage points a year ago, the data show.… Read more »
“Chicago has been carrying on as though no reckoning would ever arrive for its chronically underfunded pensions, but is everyone awake now?” – no, everyone is not awake. Pritzker will be reelected handily, no Democrat will oppose him and the IL GOP is a joke. That he will win handily tells you all you need to know about the awake question. As for Johnson, one does not to be awake to see the stunning across the board incompetency, wrongheadedness and racism. For that one only needs to breathe.
Public sector cancer has almost killed the taxpayer. Large pensions at young ages are just unsustainable at today’s levels and it looks like it is still growing rapidly. Sooner or later this Ponzi scheme will fail. High income earners are fleeing, and poor immigrants are what is left to pay for all of this. Death by public sector greed.
Almost?
Large pensions are part of the bloat, but let’s not forget large salaries, excessive number of offices, excessive number of committees and study groups, excessive number of employees, overly generous health care benefits for retirees, etc., etc., etc.