-- 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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I was told by a rich pensioner that if I do not like it I can “MOVE”. So I did, Illinois will never get a penny of my tax money again. So long suckers. Best day of my life is when the movers came by and I got on an airplane to start a better life. The fruits of your labor belong to you not some greedy cop, firemen or teacher.
The very fact that those bonds have to be securitized in the first place is just scary.
Another great article that simplifies the complicated bond world for the masses, Mark.
Regarding the statement “Others liken it to a sale of body parts”…maybe Chicago assumes it’s an octopus that can simply re-generate its tentacles that will extend to reach other revenue sources.
I wonder what the Capitol Fax crew generally thinks of this article. Reflexively, they likely dislike it intensely. But current and future pensioners – unsecured claimants – now sit behind senior and junior liens. Pension defenders have to realize just how risky this scheme is, but deep down they are likely relying on a federal bailout, so little niceties like property law don’t matter. As Trump said to Pritzker at a governors conference, “Nice State you have there”.
In the past, I have tried to post that question there, asking why the don’t see the eventual struggle between bonds and pensions. But it got blocked like so many other comments that don’t fit the narrative there. Yes, I do think many of them think there will be a federal bailout. Others think their state constitutional protection somehow makes payments certain. And union leadership is forever telling them there has never been a failure to pay public pensions, blah blah blah….
Capitol Fax is more like the Capitol Fix, as in the ‘fix’ is in. Ironically, the name of the website still uses the word ‘fax’ showing how old, outdated and out of touch those people actually are.
I’ve said this before, why are state workers allowed unfettered access to the internet and Capitol Fax to complain about pensions all day?
They are squandering state resources and time and the tax payers see not benefit from this. The IG or media needs some snooping around on this.
Yes, the blank looks I’ve gotten from cop or (especially) fire pensioners that think that a complaint “They have to pay …” is funny as they believe the hype that money can come from nowhere. Obviously they haven’t looked at the math since it would cause too much pain. Mark, would a Fed bailout, even if it happened, just be to SS max per pensioner (139k)? How would anyone deal with the moral hazard of other US taxpayers being associated with Fed spending or federal reserve balance sheet expansion? The Federal Reserve would clearly be the “savior.” But they have… Read more »
I don’t know when that day will come, but it will come. They can indeed continue to paper it over for at least a few more years. In my view, it’s already happening. Just in the south suburbs where I grew up, hundreds of thousands of families have lost their home equity — most of their life savings. All my nieces and nephews have left for other states. They are having kids now and I won’t be able to watch them grow up. Countless people like me.