-- 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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Sounds like a good concept but there should be a payback provision so the program can self fund. There should be a provision that if your $25,000 loan is paid off then a $25,000 lien is placed on your property. On a $165,000 mortgage it would only take about seven years to build up that much equity and it doesn’t increase the home buyer’s mortgage payment.
Wonder if those lucky folks are same connected people who received CHA’s ridiculous luxury-building rental vouchers for apartments in Streeterville and River North? Remember, a fair amount of “student loan debt” is for people who enroll in for-profit trade schools, not just fancy-pants private universities.
So how does a broke state (massive pension debt, chronic past due bills, etc.) get $25M to pay off personal student loans of qualified home purchasers?
The state borrowed the money by issuing bonds as part of the $45B 2019 Rebuild Illinois program.
The Illinois Housing Development Authority (IHDA) was allocated $200 million bonded from Rebuild Illinois.
Of that $200M, $25M was allocated to the SmartBuy program.
One consequence is taxpayers who never went to college are, via their taxes to the state, bailing out personal student loans of people who went to college.
These people have exchanged one type of government debt (student loans) with another type of government debt (property taxes). I noted that the average forgiveness on the loans was $24K. That would have paid for two years of property taxes for my last house in Illinois. Even if you’re generous and say taxes are $6K / YR in four years you’ve paid out as much as your student loan. Government doesn’t care, it’s getting money either way. It puts the cash in your pocket right now and slowly takes it back over the years. You are correct though, it does… Read more »
“You are correct though, it does punish people who didn’t go to college or paid their own way, either by paying off loans or attending college within their means.”
This is the goal of the Democrat party.
Taxpayers bailing out personal debt (student loans) to stimulate a housing market suffering from poor state and local fiscal policy (jacked up public sector salaries, current healthcare, pensions, retiree healthcare, etc. resulting in high taxes etc. and thus lower home appreciation etc.) is stupid. It is just another government program to “fix” problems caused by government programs that remain unfixed. Since this fix is not enough, another government will follow sooner or later, government gets bigger, and so the cycle continues. One consequence is indirectly punishing those who worked hard to pay off their student loan debt, those that worked… Read more »
Ia this drawing new buyers or buyers who were already planning to purchase a home here anyway? Like ComEd giving me a $100 rebate on an energy-efficient refrigerator I was going to buy regardless of rebate?