Skip to comments.Liberals Live in Fantasy-Land as Fitch Downgrades Chicago's Credit Rating
Posted on 11/13/2013 7:21:29 AM PST by Kaslin
It is truly pathetic watching politicians flop like fish out of water trying to prevent something that was clearly inevitable long ago.
Please consider Moodys warns of bankruptcy in Scranton as city faces $20 million budget gap.
Moodys warned investors that Scranton could be facing the threat of default or bankruptcy thanks to a $20 million budget gap for the fiscal year that begins Jan. 1. Scranton has more than $195 million in outstanding debt, according to Moodys.
A similar crisis hit the city in July 2012, which lead to Mayor Chris Doherty cutting all city workers pay to minimum wage for several weeks, a move that made national headlines.
A second liquidity crisis could have more severe effects, including additional defaults, Moodys warned.
To generate revenue necessary to address its debt, Scranton has considered taxing commuters and alcoholic drinks, though neither has been approved by the city council. The Pennsylvania Economy League, which is overseeing Scrantons Act 47 recovery plan, warned last month the city would have to raise taxes to avoid a default at the beginning of the 2014 fiscal year.
Scranton also faces more than $100 million in unfunded pension debt, on top of the $195 million in other debt owed.
Adding to Scrantons financial woes is the need to borrow another $28 million to pay a court-mandated settlement with the citys police and firefighter unions.
Tax Hike is Pure Idiocy
The numbers say everything that needs to be said. It is absolutely impossible for Scranton to dig out of this hole, I do not care how much taxes are raised.
All tax hikes can do is harm more working class citizens for the benefit of undeserving public union workers.
Whatever judge awarded the police and fire workers $28 million is an idiot or a genius, depending on his or her intent.
If the intent of the ruling was to make it clear to everyone on the planet that the only solution for Scranton was bankruptcy, then the judge succeeded.
If as I suspect, the judge actually thought police and fire fighters would receive $28 million, then the judge is living in liberal fantasyland.
Fitch Downgrades Chicago Citing Pension Problems
Yahoo!Finance reports Fitch downgrades Chicago bond ratings
Fitch dropped the rating from AA- to A- on $8 billion in general obligation bonds, backed by property taxes.
It also dropped the rating on $497 million in sales tax bonds paid for by both the city's local sales tax and its share of the state sales tax. And the rating was downgraded on $200 million in commercial paper notes, financed by a general obligation pledge from any available city fund.
Friday's downgrade stems from "the lack of meaningful solutions" to the city's pension situation. City and fire pension programs have no more than 30 percent of the money needed to cover obligations.
Scranton is several steps deeper in the hole than Chicago, but the problems are quite similar. Neither city can possibly pay pension promises.
These commie half wits make me think of someone trying to fill a bath tub without putting in the plug. Cut your costs it is the only way out.
“Public” employers should be held to the same rule as “private” employers: Fund TODAY any promise you make TODAY that requires spending on pensions and benefits TOMORROW.
Failure to fund today is inter-generational theft.
Do you remember when the “Balanced Budget” clause in every Constitution or Carter actually did protect future generations?
When (if ever) where those clauses repealed?
You know K, watching these fat cats retire at age 50 scream about their pensions is almost as sweet as watching liberals scream about their healthcare policy premiums increasing. Kinda like listening to moths approaching a flame. It’s silent and no-one really cares.
A great compare and contrast to Scranton is Allentown, home of our other Senator, Pat Toomey and a mere 75 miles away on I-476. Despite very similar demographics, populations and economies, Allentown is well-run and is not facing a fiscal Armageddon. While it definitely leans GOP in voting behavior, it is certainly not a one party town like Scranton.
I wonder what excuses the librards can make for two mid sized cities with similar resources and challenges but one is clearly successful and the other is not.
My view is that Illinois, California, and New York will eventually be allowed to issue federally guaranteed bonds.
Those states are the bedrock of Democrat national electoral strategy and must be protected at all costs.
(And I’m not naive enough to believe that guarantee is worth much, but it will buy time).
Beats me as to when they were repealed. As I see it any rule, regulation, or whatever must be accompanied by the full name and address of the author. Enough of this rule by faceless nameless dumba55es.
I'm not sure just over 50% of the base amount qualifies as "also" but there you are: while other people's money lasts, the government is the place to work. When it runs out, there's a problem.
There's also a solution - kick the problem up to another, bigger government with the ability to extract more of other people's money. I'm thinking bailout here. Come on, it'll only hurt the people of Toledo a little to ensure the government pensioners in Scranton don't lose their sweet deal. Who bails out Toledo? Not our problem.
I’m from the area and IMO the looters are already eyeing the exits and ready to snatch what they can before it all collapses. When it was going well if the Chicago area mob/D/R syndicate needed a distraction they would gin up a gun control media campaign. Let me say that is not working anymore, the downstate Ds aren’t playing because they aren’t so inclined to bail out Madigan as they once were.
Fitch is obviously being racist; Holder will surely get on their case. And the phrase “lack of meaningful solutions” is a flagrant use of a racial dog-whistle. Alert Chris Matthews.
Why in the world did Boeing move their headquarters to Chicago???