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Illinois, New Jersey, Hawaii, and Connecticut are precariously stretched to fund their debt obligations
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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I believe that bond holders and lenders to municipalities like the proposed $10 Billion to Chicago are in a no lose scenario. According to Rep Jeanne Ives in the last implementation bill – Section 8-13-10 entitled Assignments of Receipts bondholders get paid from future sales tax receipts for up to 40 years in the event of or even implied threat of bankruptcy by municipalities if legalized. This would take priority even over pensioners. This was sneaked in at the last minute by Madigan . Illinois may be the only state that has this clause? Can anyone check if this info… Read more »
The author believes there should be no bailouts, no bankruptcies allowed for states, and that voters in these four deadbeat states should be left to suffer for their malfeasance in electing these corrupt incompetents. It’s hard to argue with the emotional aspect of that idea–or that actions should have consequences. No one likes the neighbor who walks away from debt while they themselves worked their tail off. I know Mark has repeatedly stated that even if this is a noble idea, it’s naive. This slow-crash and burn will simply uproot thousands (maybe millions?) of people to go somewhere else until… Read more »
The Illinois democrat party is a white collar crime syndicate.
The State should be taken over by a group of federal judges, much like the State of Michigan taking over Detroit.
Yes the author thinks we are going down the “Scorched Earth Death Spiral” process without any bankruptcy. Dems will definitely go down the Scorched Earth Death Spiral and will be very resistant to Bankruptcy until it’s too late, then the problem will be so bad as to be catastrophic.
Hard to prove, but I think the Dems and the unions have done the calculations and have concluded they’ll make out better in the resulting chaos. First thing is that delay in filing for bankruptcy will result in those already retired continuing to get their full promised benefits + COLA + health for as long as bankruptcy can be delayed or ’til the well runs dry (whichever occurs first). Whatever was set aside for everyone will flow to those who are first piggies at the trough. In status quo mode, politicians and judges continue to accrue their pension benefits and… Read more »