-- 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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The bond raters will keep the ponzi going because the collateral that will start to be offered will be very attractive to investors. In other words they will sell the store before changing the constitution, reducing benefits, converting to 401k, bankruptcy, etc. this ponzi ain’t going anywhere. Bond holders, public employees and unions will not be the ones getting the haircut, they will just cannibalize the state for another few decades. The millenialls who are already late at establishing work, homes and marriage will just have to pay for it all.
Personally I’m glad to see Springfield become one of the first municipalities to face pension insolvency. Their deepening crisis will become national news, which will help shame our state legislators into at least admitting that a statewide crisis exists.
Harvey, Springfield and Peoria are the canary in the coalmine for Chicago.
The Chicago Mafia and the Illinois Democrats definitely will choose to go down the “Death Spiral Scorched Earth” way, they will be raising Taxes while the economy struggles and People/Wealth continue to Net Leave the state. This will cause them raise even more Taxes, rinse repeat. This will All Collapse As Soon As Lenders and Creditors refuse to lend anymore (which will most likely happen when Secured Assets and designated cash streams are all used up).