-- 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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Even if it is true that, unadjusted for investment returns, a state pension beneficiary can receive 20 times as much as he/she contributed, I am not convinced that this is unique to state pensions. There is the well-known story of Ida May Fuller, who paid a total of $24.75 in payroll taxes into Social Security over 3 years, and received nearly $23,000 in SS benefits over her lifetime – that is more like a 900 to 1 ratio. And similar things are still possible today. A spouse who has never worked, and never paid a dime into the system, can… Read more »
You really are dense. The SS cap is something like $34,000 a year and providing 1 cherry picked example does not make a rule. The cap on pensions is what, on wait, there is no cap on IL pensions. Furthermore, the US government as a sovereign nation can literally print money to fund SS whereas the state of IL has to rely on taxes or borrowing. And the state of IL can rely only on its current residents to pay pensions for retired state employees, and many people leave to avoid paying Illinois taxes; whereas no US citizen can escape… Read more »
Hi debtsor. I’ll be shopping for a home in TN this year. As far as I can tell it’s about as good as it gets for a conservative retiree….. and they are adequately funding pensions. Florida gets so much retiree attention but my concern is Florida is a purple state. I’m not willing to risk ending up in another Illinois like state 10 years from now. When I pay my first TN real estate tax bill I’ll say, “Ok…that seems reasonable.” I’ve never, ever heard anyone in Illinois say that. Usually it’s more like, “Those %^#* crooks.” Regarding Andrew’s comment….thanks… Read more »
I’m unfortunately tied to Illinois at this point in my career because of family and professional connections and licensure. I know plenty of others like me that are ‘stuck’ here but, my particular situation isn’t all *that* bad, yet. My home value is still stable, my public schools haven’t collapsed yet, my real estate taxes are high, for sure, but I live in a modest, affordable home, so my taxes are relatively low compared to others, and my conservative minded town, at least for now, is really concerned about property taxes, so much so that they cheap out on basic… Read more »
My old Illinois neighborhood still looks pretty much the same. From the looks of it you wouldn’t guess that Illinois is in any unusual financial trouble, but I’m glad I left. (I’ve been overseas for most of the last few years). Illinois is a source of stress…at least it was for me because I like to keep informed. I almost envy those that remain ignorant of all the debt and other problems. Anyway, it sounds like you know the risks and made the decision that’s best for you. I’ll save you a spot in TN for when you’re ready.
“My home value is still stable …” That’s not as bad as depreciating but not as good as appreciating. I think that, in most states, homes appreciate. Even in your modest home, you’ll still lose a lot of money over 20 years, for example. For a $300K home that stagnates in value instead of appreciating a modest two percent per year, you will have lost $146K after 20 years while your PTs will have kept increasing to pay for the bloated salaries, pensions, and health care benefits,
Good point. I would add that if you instead had that money invested in stocks instead of real estate, you would be better off. Real estate over the long haul tends to be close to inflation while stocks beat inflation.
Yes, but my home will be 80+ years old in 20 years from now, with a dated HVAC system, smallish sq footage, little to no insulation in the walls, and with plaster still in some rooms. The main beam is sagging, the floors are crooked and the attached garage is falling apart. The house will have no value in 80 years anyways, it will be a tear down, not an architectural gem, all that will be of value is the land. Land can go to zero value, heck half the south side and west side of chicago has zero value… Read more »