On the eve of Detroit’s bankruptcy filing, Moody’s downgraded the credit rating of the City of Chicago. It appears the good mayor of the Windy City Rahm Emanuel has thrown his hands up in frustration over his rather weak attempts to cut pension benefits. After all when you’re sleeping with the enemy, the unions, what do you expect?
Of course, this financial crisis will be kicked down the road until the bank of last resort is called on to rescue them, the Federal Government. The City of Chicago’s bankruptcy in two years will make Detroit look like a ripple in a pond of creditors. Billions are owed to the cities pension fund and billions more will be owed in the future. The financial strangling of a city the size of Chicago would take the entire region down economically.
If ObamaCare isn’t repealed expect most retirees to be dumped out of their current private carrier medical plan and onto ObamaCare. That’s what most City-County-State administrators and union executives are counting on thus cutting their liability. In the meantime the Chicago Tribune is reporting that most city property taxes could double to cover this shortfall temporarily. This would drive more people out of Chicago thus creating even larger revenue shortfalls and putting Chicago on the same path as Detroit.
Most liberal cities and states around the country are run the same way and will experience the same problems. With hat in hand they’ll crawl to Washington for a bailout that they can never repay. They’ll add further burdens to federal taxpayers and ultimately the Federal Reserve which will not be so kind for such irresponsible behavior.
But the big problem, apart from retiree health care liabilities, are the pension liabilities accruing across the country. Estimates surpass one hundred billion dollars and are climbing rapidly as more retirees cash in on this government handout.
As the federal government nationalized our healthcare industry with ObamaCare the nationalization of city, county and state pension plans are inevitable. The bill will eventually be passed on to the printing press of the Federal Reserve which will do to America what the European central bank is doing to Greece and all other countries that don’t balance their books.
This is further proof that eventually we all will pay with economic slowdowns, added taxes, service cuts, political upheaval and a general mood of recession for decades to come. – N.P.Contompasis