As suggested here at the Independent Sentinel several times, Illinois – President Barack Obama’s current home state – looks to be the first state in the nation to request a federal government bailout of its out of control, unfunded liabilities. Namely, union pension contracts the state refused to say “no” to and now can’t pay.
According to the latest developments, as reported by Fox News:
“Critics have in the past several days pounced on the suggestion, made last year when Quinn, in announcing the state’s fiscal 2012, said part of Illinois’ long-term effort to reduce the estimate $167 billion in under-funded liabilities would be to seek “a federal guarantee of the debt.”
Among those leading the charge is Republican Sen. Jim DeMint. The South Carolina senator has joined the Illinois Policy Institute’s national “No Pension Bailout” campaign — an effort to stop Congress from attempting to rescue failing state and municipal pension plans.
“Our greatest concern is states will assume they can run their pension systems into bankruptcy and then turn to the federal government for bailout,” DeMint said Thursday.
He also suggested the problem is the result of state legislators trying for decades to win over voters through pension promises based “on accounting methods that would put any business in jail.”
The conservative policy group estimates the total amount of under-funded pension liabilities in states is at least $2.5 trillion, with Illinois leading the nation.”
Illinois Governor Pat Quinn Wants To Redistribute The Debt
The Wall Street Journal’s editorial writers recently said: “Sooner or later, we knew it would come down to this since the Democrats who are running Illinois into the ground can’t bring themselves to oppose union demands.”
In addition, an editorial Tuesday in the Chicago Tribune argued that saving Illinois will “start a stampede of demands for equal treatment from other financially troubled states” with public pension debts ranging from $1 trillion to $25 trillion.
As you can see by the National Debt Clock’s State numbers, Illinois is running a debt of nearly $140 Billion dollars as of this very moment. For up to the minute numbers, click right here.
It would take all 12,896,624 residents of Illinois – every man, woman and child – to write a check for $10,848.00 to pay off the indebtedness.
Quite unfortunately, Illinois is far from being alone at the bottom of the debt barrel. California is in the red numbers to the tune of $384,891,000. For the very latest numbers from the Golden State, click right here. California’s debt makes Illinois look like a bunch of amateur spenders!
When you start reviewing state by state, horrible looking pictures begins to emerge. Most of this country is in debt right up to its eyebrows and only two states have actually done something politically to stem the tide of red ink.
New Jersey and Wisconsin appear to be leading the way when it comes to telling the unions “no” and forcing the renegotiation of union contracts that have everyone else crying for help from Washington, D.C.
In New Jersey, government debt and spending are both dropping while the Gross Domestic Product (GDP) and income continue to climb. New Jersey’s numbers can be seen by clicking right here.
A slightly different, but improving story to report from Wisconsin. The Debt to GDP Ratio continues to fall and, while spending is still going up, the trend has slowed of late as new government programs go into effect. Review Wisconsin’s critical figures right here.
Neither New Jersey nor Wisconsin is out of the woods financially, but both appear to have implemented changes to help bring their economies under at least some control.
Compare those actions to Illinois and/or California where the legislatures continue to spend it faster than the Fed can print it and you get a much better understanding as to why Senator DeMint and a number of his colleagues are attempting to shut off the Federal Bailout Spigot.