Marathon Pundit: First Detroit, then Chicago?

It's not just Detroit.

From the Wall Street Journal (paid subscription required):

The crisis of liberal state and city government is arriving, with Detroit in bankruptcy and now no less a Democratic potentate than Mayor Rahm Emanuel warning about the fiscal mess in Chicago. The partnership of public unions and liberal politicians is hitting the wall.

In its recent Annual Financial Analysis, the Windy City disclosed that it faces a $368 million budget deficit next year and as much as $1.5 billion by 2016. Moody's in July downgraded Chicago's credit rating three levels with a negative future outlook, citing the city's "very large and growing pension liabilities."

Mr. Emanuel told state lawmakers last year that Chicago's "day of reckoning has arrived." And now, without immediate reforms, Mr. Emanuel writes in a letter accompanying the fiscal report, "the outlook for future years is unsustainable."

He's right. Chicago has chronically underfunded its pensions, and starting next year it will have to meet a state-mandated schedule raising the city's pension payments to $479 million in 2014 and then to $1.07 billion in 2015. Chicago's four pension systems are only 36% funded, with an overall unfunded liability of $19.5 billion this year and growing.