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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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Death by Public Sector Greed.
If you are an illinoisan or Chicagoan, there are so many more options other than Bankruptcy as long as you suspend reality, which is a strength of the liberal mindset. There are so many more ways that Illinois and Chicago can raise taxes. Ask a socialist. They’ll tell you. What about just plain wealth confiscation? While Federal courts may be a problem, Illinois courts will be fine with that. Change the actuarial assumptions on the pension funds. You know rates of return of 100% per year and life expectancies of 22. The numbers can be made to work and virtually… Read more »
“The mayor and the City Council have shown no interest in reducing spending. They also know the populace will not stand for new taxes.” Austerity and new taxes may not be wanted by elected leaders or the voters but that doesn’t mean they aren’t viable solutions. Whether Chicago files bankruptcy or not, reduced spending and more taxes are in the not too distant future. It will either be forced by a bankruptcy judge when there just isn’t enough savings or it will be forced by the state when they refuse to allow bankruptcy and nobody wants to lend any more… Read more »
I don’t go as far as saying a formal bankruptcy is an essential solution, as I have written often before. For sure, the state should authorize municipal bankruptcy, but that doesn’t necessarily mean they should exercise the option. Authorization would at least give the city the tools to properly negotiate for relief. A decision to actually file should depend on a close analysis by top, practicing bankruptcy lawyers who would have to go through the assets and liabilities closely, handicap the likely outcomes for many legal battles that it would entail and more. They’d then have to come up with… Read more »
Very well said. Detroit and Michigan also were led by Mayors Dave Bing and Mike Duggan and Governor Rick Snyder, men with the intelligence, courage and credibility so lacking in Johnson and Pritzker.
Yup, and they got an exceptionally good bankruptcy judge, Steven Rhodes.
My late father-in-law practiced law in the Detroit area, knew Judge Rhodes and told me then that he was relieved that Rhodes would handle Detroit’s bankruptcy. The city and its residents, public pensioners and creditors were well served. Years later, Detroit’s downtown is safe and clean and bustling with construction projects. When I graduated from the University of Michigan in 1989, I didn’t think twice about moving back to the Chicago area. Today, I wouldn’t think twice about settling in the Detroit area.
Just for the record there are several Nobel Price winners in economics that say exactly “formal bankruptcy is an essential solution” and they added – ASAP STOP DIGGING!
Who you gonna listen to, me or Nobel Prize winners? :; Actually, I am rather serious. I think those prize winners are economists, who are no doubt very smart in their field, but don’t be surprised if they know nothing of the details of Chapter 9 bankruptcy.
Do we know who these Nobel Prize winners are? David has made this claim before but I’ve been unable to find even one. Pretty strange when he says that there are several.
No, we don’t. None to my knowledge talking about Chapter 9 specifically. Going way back there were two talking generally, though, about how dire the pension situation was:https://wirepoints.org/harshest-critics-of-public-pensions-are-nobel-prize-winning-economists-wp-original/
For a city with so much in its favor — location, natural resources, transportation, major businesses, and wealth — Democrats (in just a few decades) have pushed the city to the edge of the cliff with their incompetence, bad ideas and larceny. RIP Chicago.
The city should have to sell EVERYTHING, EVERYTHING, down to the fixtures in the museum, the harbors, buildings, parks, open land etc. to attempt to pay it’s debts. The best lessons are the hardest.
Yep, Chicago will own nothing and be happy. They’ll get to live what they’ve been preaching for years.
Agreed. The city should feel the pain from their financial decisions. Perhaps a special assessment on real estate added to the property tax bill payable over time. When a condo association doesn’t plan properly they need to charge all of its residents. The voters of Chicago should feel this pain directly so maybe next time they will be more engaged and start rewarding political leaders that stress fiscal responsibility.
Should there be any pain felt directly by the people who ran the schools into the ground and collected salaries and pensions for doing it? Since you seem so interested in making sure people feel pain for their failures and all. Asking for a friend…
That’s like asking if your landscaper should be responsible for your debt because you had a spending problem. It’s your problem not the vendors that you hired. No different here.
The people responsible for electing representatives that didn’t value fiscal responsibility are the ones to pay. That’s the voters and the residents of Chicago. So those vendors or employees that live in Chicago will pay just like all the other residents but they don’t have to pay more simply because of everyones poor spending habits.
So indirect failure (voting for politicians who fail to practice fiscal responsibility) deserves direct pain.
Direct failure (schools graduating classes of functional illiterates for years) deserves not direct pain, but excuses and rewards.
With that kind of logic, it’s no wonder the schools have failed.
They are not the ones responsible. Your irrational blame of teachers is why you don’t understand the logic. Your hatred has clouded any reasonable judgement. Grow up lady!
I must be irrational since your arguments that I hate teachers, I’m just jealous, and the new addition of grow up fail to persuade me that you are right.
Few readers envy the jobs of CPS teachers. And lots of the bad test results can be attributed to circumstances teachers can’t control. And when teachers “act out” their misery and cling to their salaries and benefits and early retirements they seem (to some) to be greedy and self-indulgent. It doesn’t help that they elect Hoffa-like strident leaders but, hell, it worked for Jimmy Hoffa (RIP). Biden even bailed out the pension plans. BUT, the liberal tide seems to be ebbing and younger teachers should be planning for changing times and possible bankruptcy. And everyone should try to lower the… Read more »
The current Parking Meter Operation is a model in the superiority of private enterprise over the inherent Corrupt Incompetence of Government. LAZ makes a profit with variable rate parking, parking rates based upon supply and demand, well run machines and constant enforcement…..and you can now actually find parking on city streets. Plus if you take a reasonable chance, you can actually park for for 5 minutes and run into the post office. City of Chicago ran the parking operation as a zero revenue employment scam and at 25 cents an hour there was no parking to be found on most… Read more »