-- 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.
SIGN UP HERE FOR OUR FREE WIREPOINTS DAILY NEWSLETTER
“Scott Baker, a senior advisor to the Public Banking Institute and economics editor at OpEdNews, has another idea. He argues that the states are far from broke. They may not be able to balance their budgets with taxes, but a search through their Comprehensive Annual Financial Reports (CAFRs) shows that they have massive surplus funds and rainy day funds tucked away around the state, most of them earning minimal returns. Recall the 1.5% made by the pension funds collectively last year. The 2016 CAFR for Illinois shows $94.6 billion in its pension fund alone, and well over $100 billion if… Read more »
??? Where in Illinois’ CAFR do you see money tucked away? It’s not there, though other states are mostly in very good shape, with many making tax cuts, thereby making Illinois still less competitive. And that money in the pensions you mentioned is more than offset (by over 2X) by the present value of the promises they have made for work already performed. (However, one place where there is some money tucked away, as I have written, is in the total managed by the Treasurer, though that sum is not a big deal compared to Illinois growing unfunded liabilities).
One of the main sins of omission in the CAFR is listing future (unfunded) liabilities, without listing future revenue which offset the liabilities.
Look at expenses and revenue over a ten year period. Illinois is taking in $50 billion more in revenue than 10 year ago, and spending every last dime of it. That is the problem, not unfunded liabilities.
Illinois Total Expenses 2011 – $71 billion
Illinois Total Expenses 2021 – $124 billion
Illinois Total Revenue 2011 – $65 billion
Illinois Total Revenue 2021 – $119 billion
Nobody counts future revenue as an asset. That would be crazy accounting. The unfunded liabilities are entirely for work already performed in the past. It’s like an uncashed paycheck, so you count only realized income. If you wanted to start accruing future revenue you would also have to accrue future expenses.
Future expenses are future liabilities, wordsmithing. The State of Illinois is spending $50 billion more per year than 10 years ago, there is no wiggle room to explain this away. And they could save a fortune by creating their own bank, another inconvenient truth.
Here is that “other idea” you are referring to: https://www.opednews.com/articles/How-to-fix-Illinois-Debt-by-Scott-Baker-Bankruptcy_Cafr_Debt-Ceiling_Debt-Ceiling-170703-604.html Pure quackery. Not even worth responding to.
A state bank is quackery? Tell that to North Dakota.
http://www.webofdebt.com/articles/economic_sovereignty.php
Frank, you sound like a shill for a wealth tax. Perhaps you should move to Cali.
You’re making stuff up. Try harder.
How can I take seriously a group that believes “men” can menstruate & get pregnant…??
Answer – I don’t…
Illinois is on a path of financial devastation. No stopping it now. The Pension Time Bomb is exploding and will continue to explode for many years to come. The numbers are going to grow like a cancer and will one day kill the State.