Tag Archives: Chicago

Chicago’s pension funds looking more like a collapsing Ponzi scheme, by Ted Dabrowski and John Klingner

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.

Continue reading

Advertisements

Debt, dope and casinos: Chicago is circling the drain, by Simon Black

All that’s left for Chicago is the bankruptcy filing. From Simon Black at sovereignman.com:

While the federal government is slowly careening toward permanent, fiscal disaster, many state governments (which don’t have the power of the printing press) are already staring into the abyss…

Take Illinois, for example. It’s the most broke state in the US with nearly $250 billion in debt. And it only brings in enough in taxes each year to cover 92% of its expenses… so the problem is getting worse.

Good thing Rahm “you never want a serious crisis to go to waste” Emmanuel is the current Mayor of Chicago. You may remember, the above quote was from Rahm’s days as Obama’s Chief of Staff, as told to the Wall Street Journalduring the depths of the Great Financial Crisis…

What followed was the greatest monetary experiment known to man.

Now Rahm has another crisis on his hands – Chicago’s woefully underfunded pensions. And he’s reaching into his old bag of tricks.

Governments can only kick the can down the road for so long. Eventually, they’ve got to make some tough decisions – like who they’re going to default on. Despite the promises made by certain political representatives, it’s impossible for everyone to have everything…

And today, Rahm must choose…

Either Chicago defaults on the pension promises it’s made to city workers or it defaults on its massive debt. It’s simple arithmetic.

Rahm, it seems, has chosen the latter.

Continue reading

‘No You Can’t.’ From The Reader To Breitbart, Broad Coalition Rallying Against Obama Center, by Mark Glennon

The lies that have been used to put over the Obama Center on Chicago are being exposed and the public is rallying against it. From Mark Glennon at wirepoints.com:

Here’s something you don’t see every day: Chicago’s progressive Readeraligned with conservative Breitbart. Both had articles Wednesday slamming the Obama Center to be built in Chicago’s Jackson Park.

And everybody in between, it seems, is upset with the proposed center for one reason or another. The community organizer has managed to inspire unusual unity:

•  Fiscal conservatives worried about our insolvent state object to how some $200 million was quietly appropriated in Illinois’ recently enacted budget for roadways around the center. Federal taxpayers will reimburse Illinois for 80% of that money, which was the subject of our recent Wall Street Journal article.

Continue reading

A more likely reason Rahm Emanuel dropped out: the Chicago time bomb, by Ted Dabrowski and John Klingner

Sooner or later Chicago will go bankrupt, and it’s certainly a plausible supposition that Rahm Emanuel wanted to get the hell out before it does. From Ted Dabrowski and John Klingner at wirepoints.com:

We may never know why Rahm Emanuel decided to drop out of the Chicago mayoral race. But the media is certainly giving him a pass. They say he simply dropped out for fear of losing. But there’s a far more likely reason than that.

Emanuel is smart, and the smart reason for leaving is glaring: He doesn’t want to risk becoming “mayor bankruptcy.” Chicago is a ticking time bomb and Emanuel is jumping ship just in case it goes off.

Don’t dismiss that scenario too quickly. Despite his lofty intentions when he first took office, Emanuel has failed miserably to reform the city’s finances. Now the risk of insolvency is rising.

Chicago’s financials are dire and the city has no plan and no reserves to survive an inevitable recession. In fact, the city has barely kept its head above the water despite a decade of national economic growth. Chicago Public Schools was already at the brink of bankruptcy just one year ago. Continue reading

The Obama Center Can Afford More Than $1 Rent, by Mark Glennon

The Obama Center is not going to a presidential library, it’s going to be Obama’s base for his continuing political operations. So why are taxpayers subsidizing it? From Mark Glennon at WirePoints via zerohedge.com:

It’s a political ‘institute,’ not a presidential library. So taxpayers shouldn’t be paying for anything…

When Barack Obama announced he would forgo a presidential library, the news was trumpeted as a win for good government. Instead, Mr. Obama would open an official center on Chicago’s South Side, funded entirely with private money. One author at Politico, who called presidential libraries a “scam,” wrote that Mr. Obama “will rip off the band-aid, removing government from what it has no business paying for.”

Now comes news that Illinois taxpayers will put up at least $174 million for roadway and transit reconfigurations needed to accommodate the Obama Center. If you don’t live in Illinois, you may be smirking – but you’ll be footing the bill, too. Eighty percent of such spending is generally reimbursed by the federal government, and Illinois officials confirmed to me that they expect to receive $139 million from Washington if they request it.

All that taxpayer money – and for what? Originally, Chicagoans imagined they’d be getting a true presidential library, akin to those they might have visited for Ronald Reagan in California or John F. Kennedy in Boston. But unlike those libraries, the Obama Center won’t be run by the National Archives and Records Administration. It won’t even house Mr. Obama’s records, artifacts and papers, which will be digitized and available online. Instead the center will be owned and operated by the Obama Foundation.

This wasn’t always the plan. In a 2014 request for proposal, the Obama Foundation said that the planned presidential library “will include an Institute that will enhance the pursuit of the President’s initiatives beyond 2017.” This institute now seems to have taken over the project. As the Chicago Tribune reported in February: “Obama said he envisions his center as a place where young people from around the world can meet each other, get training and prepare to become the next generation of leaders.” No doubt, his definition of “leaders” will be political.

To continue reading:

Surprise: All U.S. Taxpayers, Not Just Illinoisans, Will Cover Most Of The Public Funding For Obama Center Fiasco In Chicago, by Mark Glennon

Don’t confuse Chicago’s Obama Center with a nonpartisan presidential library. It’s not that at all. From Mark Glennon at wirepoints.com:

Only now has it become apparent that federal taxpayers, not Illinois taxpayers, will be funding most of the public support for the controversial Obama Center to be built on Chicago’s Southside.

Wirepoints has learned from administrative officials and legislators that at least $139 million — 80% of the public funding for the center — almost certainly will be reimbursed by the federal government. The project was already under attack for a number of other reasons, including a First Amendment “compelled speech” claim that it would force taxpayers to fund private, political advocacy.

The center was initially pitched as a privately funded presidential library. Many Illinois taxpayers therefore were angered to learn that at least $174 million was included in the state’s 1,246-page budget presented in May to rank and file General Assembly members only hours before their vote. Nor will the center be a presidential library.

However, it turns out that federal taxpayers will be the ones compelled to make the subsidy. The Illinois appropriation is for roadway and transit reconfigurations needed to accommodate the center, and 80% of such spending is generally reimbursable by the federal government. Wirepoints has confirmed with state officials that federal reimbursement of at least $139 million is highly likely.

Stoking the controversy is the stated mission of the center, which is partly political. The Original Request for Proposals said the center would “enhance the pursuit of [President Obama’s] initiatives beyond 2017.” Former President Obama has further commented to the same effect. As the Chicago Tribune put it, “As he’s long maintained, Obama said he envisions his center as a place where young people from around the world can meet each other, get training and prepare to become the next generation of leaders.”

The center is already subject to a federal lawsuit with a First Amendment claim based on taxpayer support for a private, political purpose. A lawsuit of that type is difficult to win, but it may be bolstered by the recent Janus decision by the United States Supreme Court. Janus, which barred compulsory public union membership, was based on the prohibition of compelled speech, and that same doctrine underpins the First Amendment claim about the center.

Here are the details and background:

Contrary to its clear, initial description as a presidential library, it won’t be one. The center will be owned and run by the Obama Foundation, not the National Archives and Records Administration, as are presidential libraries. Obama’s records, artifacts and papers will not be there.

To continue reading: Surprise: All U.S. Taxpayers, Not Just Illinoisans, Will Cover Most Of The Public Funding For Obama Center Fiasco In Chicago

Soda Tax Fizzles In Chicago As Cook County Officials Cast Decisive 15-1 Repeal Vote, by Tyler Durden

There’s a difference between levying a tax and projecting what you’re going to get from it, and actually collecting what you projected. The projections for Cook County’s soda tax didn’t quite pan out after soda sales crashed. From Tyler Durden at zerohedge.com:

In a shocking move that completely upends Chicago’s endless pursuit of higher taxes and an overly-regulated nanny state, the Cook County Finance Committee took the unprecedented step of voting to actually repeal their unpopular ‘soda tax’ last night.  The 15-1 vote followed an outcry from local residents and small business retailers who say their soda sales crashed 90% after the original ban was passed.  Per ABC:

 The vote to repeal the sweetened beverage tax was one spawned by revolt from people and business owners across the county, many who packed the board meeting Tuesday afternoon.

“I’m about 10 percent of where my soda sales used to be. It’s really hurt me deeply in the pocket and my workers also. I’m very happy you are understanding this and going to repeal this tax,” said Ken Blum, a blind vendor.

“I believe what we heard over the last ten and eleven months is that our residents are fed up, and they finally said enough. Tax fatigue has sunk in,” said Cook County Board Commissioner Sean Morrison.

“I have heard from the people in my district overwhelmingly, the business owners, the retailers, as well union members in this building who are opposed to this tax,” said Commissioner John Daley.

“Let me tell you I’m overjoyed and elated that this tax is going to go away. I mean the people in my district by an overwhelming majority don’t want this tax,” said Commissioner Richard Boykin.

The repeal of the tax still faces a vote from the full board which is expected later today.  That said, the repeal will not take effect until December 1, which is when the new budget is set to go into effect.

To continue reading: Soda Tax Fizzles In Chicago As Cook County Officials Cast Decisive 15-1 Repeal Vote