In his piece on Illinois’s fiscal situation at RealClearPolicy Thomas Aiello hits all the right notes but the tune is still sour:
This budget has serious changes that will affect everyone. Unfortunately, it fails to address the looming pension crisis that will be devastating to the people of Illinois if nothing is done in the short-term. Illinois has $203 billion in unfunded pensions and postretirement health-care liabilities with no long-term fiscal solution. The debt-to-revenue ratio for state and local governments is nearly 5-to-1, putting both levels of government on a path towards insolvency. If state lawmakers want to set Illinois up for future success, they must include real pension reform in the budget.
I do have one quibble with Mr. Aiello’s analysis. Contrary to common belief the young are not the most likely to start new businesses or become entrepeneurs. The middle aged are. We depend on the young to be consumers not for business investment. When they’re overly burdened by educational debt they can’t play that role.
I predict that Illinois’s legislators will be disappointed with the results of their tax increase. They anticipate getting an additional $4.3 billion from their 32% tax increase. I think they’re ignoring the run-on effects and it will be closer to $4 billion.
But the legislators and their families are doing fine, so everything’s good.
“Contrary to common belief the young are not the most likely to start new businesses or become entrepeneurs. The middle aged are.”
You bet. Basic lifecycle stuff, the one off Zukerberg or Jobs example notwithstanding.
“We depend on the young to be consumers……When they’re overly burdened by educational debt they can’t play that role.”
Sure they can. They just spent it for the benefit of professors, administrators, textbook manufacturers and landlords near college campuses……… and beer makers. And that’s the problem. But just like legislators, those recipients think that’s just fine.