Tuesday, May 12, 2015

Chicago: Junk City

Darknesss is coming
The death rattles resulting from Friday's Illinois Supreme Court ruling on pension have begun. The first noises not surprisingly come from Chicago.

From AP:
Moody's Investors Service has lowered Chicago's credit rating to junk bond status, a move Mayor Rahm Emanuel is calling irresponsible.

In making the decision Tuesday, Moody's noted the city's options for curbing growth in its unfunded pension liabilities was hurt by an Illinois Supreme Court decision.

The court on Friday struck down a state law that restructured the state of Illinois' pension obligations.

The decision by Moody's means the cost of borrowing by Chicago will increase.
And it could mean a tax increase for Chicagoans, few of whom have retirement pensions to fall back on, but they'll be kicking in more cash for those city workers who do. This will convince some residents and businesses to move out, which mean those left will have to pay even more.

Municipal bankruptcy is coming. There is no other escape for Chicago.

Related post:

IL Supreme Court makes it official: Pat Quinn was not put on earth to fix state's pension crisis

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