-- 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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When Skokie goes bankrupt it’s likely that bondholders will experience a haircut. The bondholders can’t get their money back from the pension fund. Meanwhile, the bond proceeds (less issuance costs) go into the pension fund. In effect the pensioners win and the taxpayers lose. If Skokie doesn’t go bankrupt, the bondholders will likely continue to get their money from the city and taxes will go up or services will go down. Same result. Public employees and their unions presumably pushed this program, and the legislative and executive branches of city government went along with it. Likely underwriters and bond counsel… Read more »