Soon Chicago’s pensions funds will have more beneficiaries than working contributors, which will be their absolute death knell. From Ted Dabrowski and John Klingner at wirepoints.org:
You can’t help but call it a Ponzi scheme. Not if you look at Chicago’s collapsing demographics and consider how they’re threatening the solvency of the city’s government-run pensions. Chicago households are on the hook for more than $145 billion in state and local retirement debts and there are fewer and fewer people left to pay them.
Consider first Chicago’s falling population. The city’s metropolitan population has fallen four years in a row. It’s the only top-ten city to shrink like that. In all, the Chicago MSA lost 66,000 people between 2014 and 2018.
A falling population means the city’s massive pension debts are falling on a smaller base of taxpayers. That’s bad news enough.
But another key demographic – the ratio of active government workers to pensioners – is even more concerning.
That ratio, which equaled 1.4 actives for every pensioner in 2005, has collapsed to nearly 1.05. And if the trend continues, in just a year or two there will be more pensioners draining money from the pension funds than active workers putting money in.
The answer to the issues confronting the US government may be secession by its sub-units. From James Howard Kunstler at kunstler.com:
Unfortunately for the nation, the RussiaGate fiasco is only half over. There is just too much documented official turpitude on the public record for the authorities to answer for and the institutional damage runs too deep. Act One, the Mueller investigation, was a 22-month circle-jerk of prosecutorial misconduct and media malfeasance. Act Two will be the circular firing squad of former officials assassinating each other’s character to desperately avoid prosecution.
In the meantime, there is the nation’s business which has been hopelessly burdened by an hallucinatory overlay of Wokester idiocy emanating from the campuses, so that even in the absence of the Mueller distraction every organized endeavor in this land from-sea-to-shining-sea is paralyzed by race-and-gender hustles. Next up: a national debate over reparations for slavery in the never-ending quest to monetize moral posturing. Won’t that be a mighty string of knots to untangle? Who qualifies, exactly? What about the indigenous people whose lands were overrun? And what about the Japanese interned in 1941? And what about women prevented from earning salaries all those lost decades of housewifery? And what about the brown people from many lands whose families did not come here until slavery was a long time gone? Do Silicon Valley engineers from India, and thoracic surgeons from the Philippines have to pay up for the sins of Whitey?
The people of Illinois are heading towards the exits. Understandable, given the state’s fiscal problems, insolvent pensions funds, and what’s sure to be continuously rising taxes. From Ted Dabrowski and John Klingner at wirepoints.org:
Since the turn of the century, Illinois has been in the midst of a perfect demographic storm. Residents are leaving the state in record numbers. The number of Americans moving into Illinois has hit new lows. Net foreign immigration has fallen by half. And the number of births has dropped by more than 20 percent.
These demographic forces have all combined into a single troubling fact: Illinois is shrinking. The state has lost population five years in a row. In 2018 alone, the state lost 45,000 people, the second-biggest population drop in the country.
The state’s growing domestic out-migration has been especially problematic. More Illinoisans are leaving the state at the same time that fewer Americans from other states are moving in.
The “fertility crisis” is only a crisis if it is the involuntary duty of the young to fund the benefits the old have granted themselves. From Ryan McMaken at mises.org:
anuary’s report on fertility from the CDC set off a new wave of speculation in the media about the alleged “fertility crisis.”
We continue to see headlines like Fortune magazine’s article “Americans Aren’t Making Enough Babies, Says CDC ” and we hear from experts in this Marketplace interview that replacement-level fertility, “is needed to sustain high living standards and a high quality of life.”
This latter sentiment takes us to the heart of the matter: when we hear about the fertility crisis, it is usually packaged as an economic crisis. That is, we’re told that standards of living will collapse if people don’t start to have more babies.
This argument, of course, should be noted as being distinct from other arguments— namely sociological, cultural, political, and religious arguments — in favor of higher fertility. Some of those are compelling.
I remain unconvinced, however, that a stagnant or declining population necessarily presents an economicproblem or a threat to the standard of living. The problems we were likely to encounter result from government programs and government spending — not from demography or markets themselves.