Matthew Dietrich quotes Reboot Illinois’s take on the state’s options in dealing with its public pension problem. The strategies he lists are:
- Raise taxes.
- Amend the state’s constitution.
- Dicker with the unions.
Illinois didn’t do much about its public pension problem the last time it raised taxes. There’s a time-inconsistency problem in assuming that it will do so this time around. Besides, the last time they double taxes without doubling revenue. That’s very, very bad. It means it’s a strategy with a shelf life and I strongly suspect they’d raise even less if they tried it again.
Amending the state’s constitution takes time we just don’t have. At least two years. It’s like the old prayer: Lord, send a cure! The disease is already here.
As to bargaining with the unions, at least here in Chicago (where the problems are probably the worst) the public employees’ unions have shown no willingness to hoss-trade. I’m not sure what the state or Chicago has to offer them anyway.
As I’ve said before and will no doubt say again if solving the problem were quick, painless, and easy we would’ve already solved it. It’s going to be long, painful, and difficult. The best approach is to agree on shared sacrifice with everyone joining hands and jumping together. I see no signs of that yet.
http://www.zerohedge.com/news/2015-05-19/why-chicago-bonds-are-junk-7-charts
Not inspiring.
A lot of what’s in the post are things I’ve gone over here in the past. Something missing from the post: Chicago froze its payment into the public employees’ pension fund almost twenty years ago. It’s been paying the same amount even as its obligations rose as did inflation. That’s no way to run a railroad.
This is a load of crap. Hell, my grandmother has been getting 8% annual return. She would be doing it “standing on her head”, but she is dead.
The first lesson of hustling is to never believe your bullshit. The second lesson is to keep your lies straight. Warren Buffett did not become a multi-billionaire by forgetting which lie he told last week.
I do not know if you saw this: Rate Shopping Whores and Chicago’s Bond Rating.