Posted on 06/18/2010 7:25:33 AM PDT by blam
Nearly Bankrupt Illinois Forced To Pay Through The Nose To Borrow Money
Joe Weisenthal
Jun. 18, 2010, 9:02 AM
Image: myonlinemaps.com
The market has lost confidence in Illinois, a state which has now adopted its own IOU system.
Bloomberg:
Illinois sold $300 million of Build America Bonds at a yield premium over Treasuries about 40 percent higher than two months ago after lawmakers failed to close a $13 billion budget deficit for the year starting July 1.
The fifth most-populous U.S. state sold the taxable debt maturing in 2035 priced to yield 7.1 percent yesterday, or 297 basis points over the 2040 Treasury to which it was benchmarked, according to data compiled by Bloomberg. Illinois offered Build Americas of similar maturity at spreads of 205 basis points and 210 basis points in two April issues, Bloomberg data show. A basis point is 0.01 percentage point.
Read the whole thing >
[snip]
(Excerpt) Read more at businessinsider.com ...
Evidently the situation in Illinois has gotten so bad that it's now going to resort to a California-like IOU system, except even worse. There will be no physical IOUs, just acknowledgment of unpaid claims to non-profit organizations to which it owes money.
It sure is a funny looking Recovery.
Libtard controlled states...most to all of them in this situation....it’s hilarious and yet, the people in them states fail to wake the frak up....lulz. *shakeshead*
High speed trains from Springfield to Warren, will save them.
( Willie Green economics/ off )
The incompetence of state and federal officials would be amusing if it weren’t so treasonous.
The fundamental motivation and reward for any bureaucracy is to make problems worse. Solutions to problems threaten the very existence of the bureaucracy. Where as if the problem gets worse, the bureaucracy needs more staff, budgets, buildings, existing first come members get promoted with higher salaries to oversee the new hires.
Bingo! I make that point all the time.
It’s not incompetence. Growing the problem is security. If they got something done, then what? The important thing is to look busy for twenty years until you retire to Jupiter, Florida, or Sedona, Arizona.
A high rate? So what! They have no intention of paying off anyhow!!!
That's a pretty good yield... for anyone that doesn't need their money back.
James M. Buchanan won a Nobel in economics for this. It’s called ‘Public Choice Theory’. Public as in government, a ‘choice’ as in gov workers have human action and are able to, like any hunter/gather human, shape/farm/structure their environment to maximize their prosperity.
I know, I know, it’s sad to see the dreamy mental picture of the selfless, sacrificing, moral angels of government employment be described in such crass terms, but sadly, never the less, we must slog on.
http://perspicuity.net/sd/pub-choice.html
Only a fool would loan NY, CA, IL money.
If you leave the greater Chicago area, you can’t hardly find a dem in IL. I live in the Bloomington/Normal area, and we have gone dem a time or two, but we also have a LOT of Chicago kids going to school at Illinois State.
The democratic machine in Chicago is almost too great to overcome. I hope and pray that someone with enough scrotal circumference comes to the scene soon who stands up to the machine!
It is not incompetence it is evil corruption.
People post things here - “Oh Obama is incompetent” - no he knows what he is doing - he is destroying the USA but sheep that watch TV enable him
” That’s a pretty good yield... for anyone that doesn’t need their money back. “
ROTFLOL!
Now we’re going to hear about the evil rich bleeding Illinois for money.
I think the politicians should borrow from the Mafia. It might be fun to watch when they default.
They are overcoming themselves slowly. Paid something like 10.5% tax on a meal in Cook County late last year. They will go bankrupt and eventually some libs will get the point, some never will.
Many here in downstate IL wish we’d start talking about seceding from Chicago. Let Daley and his pals fight over Cook and the collar counties, put up a fence and charge admission, we don’t care.
That a state with the resources of IL is in such shape is criminal. Which, by the way, also describes many of those we have elected to lead it.
Pogo was right.
Unless Brady wins the Gov. and pulls several big rabbits out of his hat ala Chris Cristie, this state will be BK in a year.
We have a candidate for the Senate who lent money to the mob, so there’s already a business relationship there.
Fortunately for the thugocracy that runs IL, they will soon have a new source of revenue when BO’s BP slush fund gets going.
Joe Barton was exactly right, but of course, you can’t “speak truth to power” unless it is allowed by the state-run media to further Socialism.
I want to see it the other way around. Maybe a few knees broken would be good for the esprit de corp
The problem I see is that while there are laboratories for democracy in the various states - the ones that behave like CA/IL/NY know that there is a federal bailout of sorts just waiting for them. So they export, or externalize, the costs of their irresponsibility, and a farmer in Kansas or family in Georgia ends up picking up the tab.
I realize it would be a bumpy ride - but I’d rather see the Fed sit back and let a state default in order to teach the other 49 a serious lesson.
I could go along with that.
Anyone fool enough to lend Illinois any more money, on any terms whatsoever, deserves what they’ll get.
It’s about taking responsibility. Had these states not spent money like drunken sailors, they would not be in this mess. The problem is they don’t want to do what is necessary to mitigate the damages they are suffering. They do not want to, say, lay off all those excess workers, get rid of the SEIU and other unions, extract the government from involvement in charitable and other endeavors that should not be the business of government in the first place, stop spending money on Lexuses for the governor and so on. Lenders all the time refuse loans to individuals and businesses who can’t get a handle on their money, or they charge extra for the borrowings in order to minimize the risk. The same should apply to the states and other municipalities. If they aren’t willing to make the effort to put together a reasonable budget and stick to it, then a lender should be able to charge whatever usury it can. I’m willing to bet that had states like Illinois lived within their means and took steps to get their financial houses in order, they wouldn’t have to borrow money at exhorbitant rates.
Yeah, you did, but the meal tax you paid is built into the price of the meal and you never saw it ... the 10.5% you saw was the sales tax in Chicago (state and county combined), and it is charged on the already tax loaded price of the meal! Pay tax on tax ... that's the Chicago way.
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