-- 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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So basically investors get to meet with lightfoot in person on how best to screw over the taxpayers. What an opportunity! Horse trading where the taxpayers are the horses? What other thing of value can she offer other than the fruits of taxpayer labor and property?
If all future revenue streams are bought up and owned by bond holders, and thus protected from bankruptcy, that should make things rather simple. Chicago owns nothing. It shouldn’t be difficult for a court to decide how to divide that up.
It sounds to me like this “innovation” in financing will now become a permanent fixture, separating assets from the municipality in exchange for hard liens and lower interest rates.
The thirst for more money and budget flexibility in the short-term will have some very adverse consequences for long-run financing, once the ratios get too risky for this instrument, too.
Why do we continue to do this to our children?