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Illinois Will Be The Poster Case For State Bankruptcy
Forbes ^ | June 5, 2020 | Ike Brannon

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 solvency—even a quick economic recovery and a robust bull market won’t make a dent in its structural deficit, and its aging—and fleeing—population 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 time—expect it to follow California's lead and increase tax rates for all of 2020 shortly after the election—but 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 there’s 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 ...


TOPICS: Government; US: California; US: Illinois; US: Kentucky; US: Minnesota; US: New York
KEYWORDS: botox; california; illinois; illinoisbankruptcy; kentucky; minnesota; mitchmcconnell; nancypelosi; newyork; sanfrancisco; sanfrannan
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1 posted on 06/09/2020 9:36:29 AM PDT by re_tail20
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To: re_tail20

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.


2 posted on 06/09/2020 9:39:07 AM PDT by PGR88
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To: re_tail20

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.


3 posted on 06/09/2020 9:40:03 AM PDT by cgbg (Kneeling is a half measure--lefties need to dig a six foot hole and bury themselves in it.)
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To: re_tail20

Bonds for the City of Chicago are one notch above Junk status now.

L


4 posted on 06/09/2020 9:41:08 AM PDT by Lurker (Peaceful coexistence with the Left is not possible. Stop pretending that it is.)
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To: re_tail20

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.


5 posted on 06/09/2020 9:42:26 AM PDT by kearnyirish2 (Affirmative action is economic warfare against white males (and therefore white families).)
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To: re_tail20

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.


6 posted on 06/09/2020 9:43:42 AM PDT by PeterPrinciple (Thinking Caps are no longer being issued but there must be a warehouse full of them somewhere.)
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To: re_tail20

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.


7 posted on 06/09/2020 9:43:44 AM PDT by GailA ( I AM A TRUMP GIRL)
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To: PGR88

It must go bankrupt and collapse and only then is change possible.


Nothing changes till the cash flow stops.

I notices you used the word POSSIBLE. That is correct, sometimes they continue doing the same thing with new creditors.


8 posted on 06/09/2020 9:45:41 AM PDT by PeterPrinciple (Thinking Caps are no longer being issued but there must be a warehouse full of them somewhere.)
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To: re_tail20

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.


9 posted on 06/09/2020 9:49:27 AM PDT by LibFreeUSA
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To: re_tail20

If they defund the police, they can save a lot of money in salaries and pensions.....


10 posted on 06/09/2020 9:52:13 AM PDT by VanShuyten ("...that all the donkeys were dead. I know nothing as to the fate of the less valuable animals.")
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To: re_tail20

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


11 posted on 06/09/2020 9:54:06 AM PDT by faithhopecharity (Politicians are not born, they’re excreted. Marcus Tullius Cicero (106 to 43 BCE))
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To: re_tail20

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.
https://www.penguinrandomhouse.com/blog/2018/09/14/visitors-guide-to-dantes-nine-circles-of-hell


12 posted on 06/09/2020 9:54:44 AM PDT by DUMBGRUNT
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To: re_tail20

My aunt has been drawing an Illinois teacher’s pension and health insurance for almost 30 years.

Her health is failing - what incredible timing!


13 posted on 06/09/2020 9:56:20 AM PDT by zeestephen
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To: re_tail20

Without a constitutional amendment to remove property rights from public pensions, Illinois should not get a cent.


14 posted on 06/09/2020 9:56:49 AM PDT by jimfree (My19 y/o granddaughter continues to have more quality exec experience than an 8 year Obama.)
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To: DUMBGRUNT

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.


15 posted on 06/09/2020 9:58:39 AM PDT by DIRTYSECRET (urope. Why do they put up with this.)
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To: DIRTYSECRET
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.

In Illinois, the pensions are hard-coded into the State Constitution.
16 posted on 06/09/2020 10:01:10 AM PDT by Dr. Sivana (There is no salvation in politics)
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To: Dr. Sivana
" In Illinois, the pensions are hard-coded into the State Constitution."

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.

17 posted on 06/09/2020 10:08:23 AM PDT by taildragger ("Do you hear the people Singing? Singing the Songs of Angry Men!")
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To: re_tail20

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.


18 posted on 06/09/2020 10:24:59 AM PDT by pas
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To: re_tail20

Maybe they can borrow some money from Puerto Rico.


19 posted on 06/09/2020 10:39:50 AM PDT by blueunicorn6 ("A crack shot and a good dancer”)
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To: re_tail20

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?


20 posted on 06/09/2020 10:44:08 AM PDT by circlecity
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