IBGYBG in Chicago

by Dave Schuler on February 5, 2014

The editors of the Chicago Tribune tell the bald and sad truth:

Emanuel didn’t excavate the deep debt chasm into which City Hall has descended. But his administration has tumbled into the same habits as his predecessor. Chicago pols and public officials have grown accustomed — addicted, really — to the easy borrowing that lets them survive the next election without telling taxpayers the truth: We are consuming more in services than we’re collecting in revenue, and that foolishness has got to stop.

Yes, stopping the deficit spending that Chicago’s rising debt obscures someday will require a radical downsizing of the city payroll, an unsettling end to some services and outsourcing of others, a stark rise in taxes, or all three. Those slashes will inflict inconvenience, and in some cases hardship, on Chicagoans.

As me auld mither used to say “grasp the nettle”. What are Chicago’s politicians doing instead?

Of course, for many years Detroit was not today’s broke and broken Detroit. Msall again: “Detroit politicians made choices based on short-term political benefits rather than the long-term welfare of their city.”

Think on that as Chicago aldermen decide whether to authorize another up-to-$900 million in bonds backed by property taxes — and to double, to $1 billion, the amount of short-term bank money that City Hall can borrow to raise cash.

It’s time to grasp the nettle.

{ 11 comments… read them below or add one }

TastyBits February 5, 2014 at 9:24 am

What about the idiots who lend Chicago money. When Chicago goes bankrupt, they are going to be whining about losing money. They are betting these cities are Too Big To Fail. Let a few bondholders get wiped out, and with the skyrocketing interest rates, the problem will be solved.

It’s that “free market” thing my conservative friends keep harping about.

Tim February 5, 2014 at 9:31 am

I think there are many eyes in City Hall on Detroit’s bankruptcy.

Illinois has different state laws, but you can bet that there are those in Chicago seeing if they can use bankruptcy as a blunt instrument to reduce employee pay and possibly pension obligations, doing in the public sector what airlines did in the private sector starting about decade ago.

jan February 5, 2014 at 10:34 am

I think Tim is on to something in describing bankruptcy as a ‘blunt instrument” — maybe even a get-out-of-jail card — in addressing Chicago’s many fiscal problems, sans the flak of extreme union interference and disruption.

Dave Schuler February 5, 2014 at 10:48 am

I suspect that the effectiveness of that as a strategy would depend on whether a judge saw it as a strategy. Indeed, it might be seen as fraud.

... February 5, 2014 at 10:10 pm

When Chicago goes bankrupt, they are going to be whining about losing money.

If Chicago’s losses are too big, you can be damned certain that the US government and the Fed will step in to pay off the important bondholders at 100 cents (plus all due interest) on the dollar. Is there any reason to believe differently after but the alleged conservatives and the alleged liberals have fallen all over themselves to genuflect before the big shots of finance? After all, we can’t let Charlie Munger lose one read cent, or it will be Hell for all the poor people.

Red Barchetta February 6, 2014 at 6:27 am

Tasty

You seem to have fallen prey to the false notion that “centrism” is good in and of itself, feeling good about yourself for, say, sarcasm towards free market conservatism even when your assertion is false. I know of no conservative who would be supportive of a bondholder bailout. Some liberals/Democrats and corporatist Republicans? Yes. Conservatives? No.

And ice, you’ve just plain and simply gone batshit crazy. You noted that you were a “financial analyst.” I’ve seen precious little evidence of that.

... February 6, 2014 at 8:55 am

What’s crazy, Red? The idea that the government will bail out big financial interests at the expense of everyone else? The idea that billionaires will be spared loses? I didn’t just pick Munger’s name out of a hat randomly, ya know.

TastyBits February 6, 2014 at 10:09 am

@Drew

I mock the “free market” conservatives cite. There are possible a handful of living conservatives or libertarians who could articulate the concept of free, market, and free market.

It would be even better if these concepts could be used a coherent and logically sound philosophy to support one’s positions.

If you understand the underpinnings of capitalism, you can destroy any marxist or marx-like argument in 3-4 paragraphs, and you can throw in evolution just for fun. Always use your opponents favorite sticks against them.

As to “centrism” positions, this is more than likely due to your not understanding the underlying concepts. “Free trade” is a policy built upon a mishmash of incoherent concepts. Whether this is intentional or not is immaterial.

The problem for conservatives is that they have gotten in bed with Republicans. Conservatives often use Republican talking points with no thought. If you are not sure a talking point comports with your philosophy, it is best to not repeat it.

jan February 6, 2014 at 10:45 am

Conservatives often use Republican talking points with no thought.

Give an example.

TastyBits February 6, 2014 at 10:53 am

Free market, free trade

TastyBits February 6, 2014 at 2:03 pm

@Drew

I hope that you know what I am doing with the minimum wage annual COLA suggestion.

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