Photo of a Chicago crime scene. Chicago is one of the most dangerous cities in the nation and has some of the strictest gun laws. The gun laws can’t fix the cultural and financial problems people choose to ignore.
Chicago is the next liberal city facing unsustainable debt, with the entire liberal state of Illinois right behind.
Chicago has more assets and resources than Detroit and they have a large population, but they also have mounting and unsustainable pension liabilities because of bad deals they negotiated with union leaders.
Moody’s ordered a rarely-heard of triple-drop in the city’s bond rating, citing Chicago’s “very large and growing” pension liabilities. As with most liberal states in their position, they did not set aside funds to pay for their promised payoffs.
The downgrade came just days after the Securities and Exchange Commission accused Illinois of committing securities fraud by misleading bond investors about its pension finances from 2005 to 2009. Moody’s stated that this underscores the urgent need for pension reform [don’t expect Rahm to get that done]. The legislature is in limbo and there will have to be cuts to all services without pension reform.
Unions believe they do not have to suffer with the rest of us as a privileged class.
There are bills in Springfield being pushed by Democrats that would handle pension reform piecemeal. SEC criticism urged Democrats to take a “holistic, comprehensive approach to solving the pension problem.”
Moody’s also cited their “significant” debt service payments and “unrelenting public safety demands” with corresponding resistance to local tax hikes to pay for it all.
The debt is so high that taxpayers in Chicago owe $63,525 per household mostly due to pension shortfalls. In the suburbs, it is about $33,000. Local governments in Cook County hold a total of $108 billion in debt and unfunded pensions. The Chicago Board of Education is one of the biggest holders of unfunded pension liability, totaling over $4 billion in unfunded pensions. The city of Chicago itself has just shy of $12 billion of the same, according to HuffPo.
Chicago is seen as so dangerous that at least one lawmaker is demanding National Guard patrol the streets at night. The new gangs coming up in Chicago are younger and more ruthless. Turf wars have ticked the violence up. Chicago’s strict gun laws only mean they are taking guns from legal gun owners who might otherwise be able to defend themselves.
There were 532 murders in Chicago in 2012 and they are looking to beat that record in 2013. There were 405 Coalition deaths in Afghanistan in 2012. 310 of the 405 deaths were Americans. You had a better chance of survival in Afghanistan than in Chicago in 2012.
The accruing interest on their debt will be too large to pay at some point.
Mayor Rahm Emanuel has continued the mistakes of the past only more so with his government mismanagement. He ended 2012 with $33.4 million in unallocated cash on hand which is down from $167 million the year before while adding to the mountain of debt.
Many of the south suburbs of Chicago are facing economic crisis. Sauk Village for instance has a contaminated water system. It’s an expensive calamity for a mismanaged government and a suburb drained of resources. The residents approved a $20 million bond issue but they might not have the financial stability to sell it.
Fox Heights can’t afford a police department so it uses Cook County sheriff’s police.
Robbins can barely pay the bills.
The Illinois state government is also facing a financial black hole.
Chicago’s south suburbs have been hit much harder than the rest of the nation.
Many of the factory jobs have been outsourced overseas. Northwestern Steel and Wire for example, is down from over 4000 workers to only about 200. The Democrats in Chicago haven’t put together the cost of their big unions as one of the major reasons these companies look to other countries for their labor.