Skip to comments.Illinois Will Be The Poster Case For State Bankruptcy
Posted on 06/09/2020 9:36:29 AM PDT by re_tail20
The dispute between Senate Majority Leader Mitch McConnell and House Speaker Nancy Pelosi as to whether the next stimulus bill will contain money for state and local governments should resonate in Illinois because, absent a very big dollop of federal dollars or a miraculous economic rebound, the state will soon need Senator McConnell to make good on his alternative plan to create a path to bankruptcy for the states.
At this point, Illinois has no hope of its underfunded state pension programs ever returning to solvencyeven a quick economic recovery and a robust bull market wont make a dent in its structural deficit, and its agingand fleeingpopulation means that pension costs are going to continue to grow and outpace revenues without some sort of structural change that cannot be accomplished without federal help.
The passage of the amendment in November that would allow the state to impose progressive taxation may buy it some timeexpect it to follow California's lead and increase tax rates for all of 2020 shortly after the electionbut even that windfall won't be enough to fix things.
But the promise that top tax rates will only go to 7 percent and only for those who earn over $250,000 a year is simply untenable: income taxes will have to go up a lot and for everyone, sooner rather than later.
Ultimately, it may not be the state's decision alone regarding future tax increases: At some point the municipal bond investors will come to realize that theres little hope that the state can make good on its contractual obligations to repay them, and the market for Illinois bonds will freeze up. If the state cannot access capital markets and the federal government won't give or lend them money, they will be stuck. At that point, negotiations between the state...
(Excerpt) Read more at forbes.com ...
As with the Soviet Union - a highly bureaucratized, one-party, ideological cronies kleptocracy can not be reformed from within. It must go bankrupt and collapse and only then is change possible.
State tax increases on the rich are a joke—the rich just hire tax accountants to give them excellent advice.
In many cases the advice is simple—move out of state (or at least live out of state enough of the year to avoid state income taxes).
Here in CT we are over-run with Florida license plates during the summer.
Bonds for the City of Chicago are one notch above Junk status now.
This is a consequence we’re also seeing in NJ; we’ve chased out employers and young skilled workers, replaced them with imported Thirdworlders and welfarians, and now have little tax base left. The imports cost a ton in services (especially public schools, at least 2/3 of our sky-high property taxes), and contribute little to nothing.
The recent debate about whether illegals could receive stimulus money hit home here (and in neighboring NY), because they replaced viable economies with primitive black-market economies powered by illegal alien labor.
bankruptcy is an organized set of rules for business and individuals for who stands in line first for the assets.
There is just not a legal set of rules for government entities.
Right now who stands first in line for assets is POLITICAL.
NASHVILLE 32% PROPERTY TAX HIKE ON TABLE, seniors, young, rich will flee and it will be a desolate waste land for business and people who can’t move. CM stars are mostly moved out of the county.
It must go bankrupt and collapse and only then is change possible.
I notices you used the word POSSIBLE. That is correct, sometimes they continue doing the same thing with new creditors.
Let all the Democrat states FALL, along with the Democrat party.
We are headed for two countries within one.
People will have to migrate out until these idiots come to their senses.
If you chose to vote Democrat, and stay, so be it.
If they defund the police, they can save a lot of money in salaries and pensions.....
bailing out politicians who waste taxpayer money or use it to buy votes and rig re-elections.... NO MAS!
let them fail
and then “bail out” whatever pieces of their wreckage are still needed, okay
let them reap the failure crop they’ve sewn
Greed is a burning thing and it makes a fiery ring
Bringing me the wild desire I fell into a ring of fire
I fell into into the burning ring of fire
I fell down down down down into the deepest fire
And it burns burns burns burns the ring of fire the ring of fire
The ring of fire
The taste of money is sweet when two pols wallets meet
I believe you like a child oh but the fire went wild
I fell into into the burning ring of fire
Fourth Circle of Hell: Greed
This section of Hell is reserved for the money-grubbers and overly materialistic among us. According to Dante, those condemned to the fourth circle spend eternity fighting over money and valuables, so be prepared to meet all of your distant cousins who show up out of nowhere with empty U-Haul trucks moments the moment after a well-to-do great aunt or uncle dies.
My aunt has been drawing an Illinois teacher’s pension and health insurance for almost 30 years.
Her health is failing - what incredible timing!
Without a constitutional amendment to remove property rights from public pensions, Illinois should not get a cent.
I think the pensions of lefties will be the easiest target but it won’t be the softest. I say cap pensions off at $30k/yr if not ZERO.
Yes Dr yes it is, and they are on their own. They will collapse and pay out what? They can't print currency, they can only tax so much. They screwed their own pooch, and their isn't a thing we can do about, it they own this train wreck.I don't ever want to visit the City or State again to spend my tourist dollars.
So Forbes admits the issue is really the over promised pension plans of these states and not the economy. This was going to happen sooner or later.
Maybe they can borrow some money from Puerto Rico.
Why should any state try to live within their means if others are allowed to promise govt workers the moon and then dump the costs onto the rest of the country?
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