Totaling the unsustainable tax increases and windfall revenue during Pritzker Administration – Wirepoints
May 26, 2026
23 Comments
With $162 billion more from taxpayers, couldn’t you deliver a few bond upgrades, too
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A largely unasked question is becoming glaring: Is Illinois doing all it should to use artificial intelligence to make government cost less and work better? So far, the evidence says no.
They aren’t “vigilantes.” They are actually called intelligent business people who can do math.” With so many options as to where you can invest your money, why would you buy debt from a moronic mayor, living in a state run by a silly fat rich guy, for debt in a city where they shoot people who turn on a Christmas tree and light ladies on fire on the subway? The muni bond market is so big no one has to take a chance to buy junk from Chicago. And Goldman Sachs? Their string of corruption settlements and payment for transactions… Read more »
Listen to Old Spartan. I know who he is. He’s had years of direct experience in this, knows his stuff and is candid.
Bonds holders are considered the “smart” investors.
The can kicking in Chicago will stop when bond holders stop buying.
Looks like they have finally stopped buying Chicago debt.
In the 1970’s, NYC municipal pension funds were backed by NYC municipal bonds! We know what happened then. They went to Jerry Ford and asked him to bailout NYC. To his credit (no pun intended) he told NYC to balance their budget 1st.
When NY could no longer get more loans and Ford told them to get it in order, NY was forced to finally deal with their spending problems. How did they do that? Massive layoffs of city workers. Closures of hospitals, firehouses and subway lines. Increased tuition for the CUNY school system. Cuts to police, sanitation, and transit. Wage freezes for remaining workers Unions initially bought city bonds to provide short term financing. After state control mechanisms were put in place, banks agreed to refinance short term debt into longer terms. After the state provided the oversight and the city got… Read more »
I don’t see how anyone could trust our corrupt state government to provide any oversight.
Illinoisans, As PPF details above time to rethink your residency status in this fiscal black hole of a state.
Remember,
Stay and Pay
Leave and SAVE
I left over 20 years ago and my bank account is $200,000 fatter because of my smart financial decision!!
Then there is this; Central Falls, R.I. — In 2011 Rhode Island’s smallest town filed for bankruptcy. With $16 million in revenues, the city owed $80 million in pension and health-care benefits and was sinking under a $6 million budget deficit. The town grossly underfunded a pension and generous benefits, allowing public-safety workers to retire at 43 with a reduced salary. A recent Pew Center report on Central Falls’ experience with bankruptcy notes that 60 percent of workers took advantage of these generous terms. And to add to the problem, the city skipped out on payments to the pension between 2009… Read more »
Sure, a Chicago bankruptcy could copy the town the size of 1.27 square miles with a 150 pensioners or they will do something similar to a large city like New York. Somehow I think the politics of the situation will follow more closely to NY. FYI, the case you mentioned ultimately had the state step in and provide funding to make sure pensioners received 75% of their original amount.
Detroit was >600k people and almost as corrupt as Chicago. Pensioners got haircuts but the state put money on the table to avoid sale of art museum treasures, and smaller haircut was possible. Teachers were not a major factor because they were in a state plan. Bankruptcy including pension haircuts makes a lot of sense and Chicago is fully accustomed to strikes, riots and possible arson that are likely to occur upon filing of a Chapter 9. With the credit rating already in the tank, disorder is already on the horizon … So why not cut the knot and deal… Read more »
To his credit (no pun intended) he told NYC to balance their budget 1st.
As I recall the famous headline from the NY Daily News: Ford to City: Drop Dead
One hopes one day the Sun Times will run the headline: Trump to City: Drop Dead
Mayor BJ better use his 10th grade math skills to figure this out.
Good luck Chicago!!
10th grade is being generous. Pretty sure Algebra II/Trig is beyong the scope of his competence. Fourth grade skills at best.
Who takes the direct hit when these bonds default? Charitable endowments, multi millionaire investors, bank capital reserves? The collapse won’t be confined to Illinois.
Good question. I suspect most of these bonds are bought by muni bond funds, rather than individuals or even specific endowments or pension funds. Although I’ve bought individual issues, I suspect most are bought by pooled muni bond funds. That might be knowable, but I don’t know it. Assuming it’s funds, then default is contemplated, in principle, and reflected in the rates; BUT an actual default by a big name like Chicago, as obvious as it is, would sends shudders through the market. All of a sudden municipal bond prices nationally would have to openly discuss default risk, instead of… Read more »
Tax-free municipal bonds are held almost entirely by upper bracket individuals, either directly or through bond funds. Some muni bonds are taxable and are held more broadly by institutions like Jerry says. I would not look for some big boom coming from a default. Default in the foreseeable future is not likely under current leadership. Instead, it’s a gradual erosion in Chicago bond prices and city creditworthiness. Of course, it would be different if new leadership took over and handled this like such crises are handled in the private sector. As one of Chicago’s very top investors at a leading… Read more »
Would interest payments and redemptions continue during a chapter 9 process?
Very doubtful. They would continue only if the judge was convinced that, under a final reorganization plan, the bonds and other creditors would be paid in full. Bonds would continue to be paid if they are secured. Some are secured.
Because the city is borrowing to cover operating expenses, events like Goldman being stuck with inventory it couldn’t sell increases the cost of the addiction to borrow for operations. Trouble drips on gradually, but then could visit significantly all at once.
I would love to hear what Goldman Sachs really thinks about these failed offerings.
They better be ready to be called a bunch of racists. It’s coming.
I know exactly what underwriters think. While I don’t know the underwriters on this deal, I know and talk to some who are active in Illinois. And in the past, when I worked in the field, I knew quite a few. This is a huge alarm bell, especially because Goldman was the underwriter. This is extremely unusual — “incredibly unusual” one underwriter told me today. The last time this happened to Chicago was over 40 years ago but that was for technical complications from exceptionally high interest rates and usury laws. Most of the industry cares only about getting more… Read more »
““How did you go bankrupt?” Bill asked.
“Two ways,” Mike said. “Gradually and then suddenly.””
From Hemingway’s “The Son Also Rises”
Chicago risk free bonds is an oxymoron. I question if they can find anyone stupid enough in the US atleast to buy these bonds. Bankruptcy is around the corner
Sometimes all that’s needed is a small crack in the dam for everyone to race for the exits.