Are more Cities going bankrupt, Are public sector unions legitimate, Chicago debts, How much debt is held by local and state governments, How much does Cook County owe, Public Debt Crisis in America, Public sector unions evil, Tocqueville on Bribing people with their own people, What cities are going bankrupt
Everyone is familiar with the United States debt; a nearly seventeen trillion dollar time bomb with no plans to defuse. While the American national debt is serious and even possibly catastrophic it does not represent the only public debt crises facing Americans. There is a creeping crisis hiding in the shadows that is nearly as large and is already creating havoc for millions of Americans.
The municipal and state debt in the United States, like that in China, is a threat being overlooked by media pundits economic commentators alike. Increasing at an alarming rate, the debts threaten the fiscal health of the nation. The crisis is especially acute in metropolitan areas that have accumulated large debts but have no real way to pay for them. Those that were shocked at what happened to Detroit might want to take a look at what has been happening in their own back yards.
According to one study by Harvard’s Institute of Politics and the University of Pennsylvania’s Fels Institute of Government the current municipal debt is around 7 trillion dollars. A staggering number when one stops to think this is not a debt evenly distributed around the country but concentrated in pockets throughout. Cook county Illinois, home of Chicago, in tallying up its debts came up with a figure of 140 billion with no guarantee that that figure includes all of the county’s liabilities. That’s $25,000 per person. An amount that does not include liabilities for Chicago city debt that many of the residents are also on the hook for. The sad part is Cook county is not alone, municipal governments across the country are facing similar challenges.
The main driver of the debt has been runaway pension cost. Public Sector Unions have been bilking American States and municipalities for years. As the saying goes, ‘by hook or by crook,’ the unions have alternately extorted the taxpayers and colluded with politicians to get themselves thickly padded benefit packages. Benefits that all have come at the expense of taxpayers. Their hefty paychecks, luxurious health plans and golden pensions have come at a dear price. Of all of these, it is the pensions that have done the most damage. With no need to come up with revenue right away, unions were issued taxpayer backed IOUs to cover future pension cost. In a page out of Wimpy’s playbook, the politicians gladly promised to pay up in the future for making bad deals today. Especially when those Deals meant union support in upcoming elections. With the help of soulless politicians, unions like SEIU and the AFL-CIO have been bleeding state and local governments dry. Presently pnly 19 states have well funded retirement systems. On the local level you have cities in every state whose pension funds are running dry. When these governments try to dial back the pensions driving them bankrupt they run into the same unions that caused the problem. Unions whose leadership doesn’t care if the cities shrivel up and die as long as they get their promised cut first.
To make matters worse the politicians, whose schemes to get re-elected know no bounds, have continually found new ways to create even more debt. Pet projects and political payoffs are rarely put off for lack of funds. If their is no way to make payments on a bond they simply use delayed payment bonds instead. The attitude seems to be who cares if they just signed the city’s death warrant, as long as the execution comes well after they retire. In effect they have been robbing children’s piggy banks to pay off union cronies and bribe the public with projects they can’t afford. While some of these debts are approved by the taxpayers themselves most are not. In New York for instances, even though the constitution of New York says all debt must be approved by taxpayers, only about 5% are.
Many cities are just now coming to grips with the issue. Sacramento California is facing 2 billion dollars of obligations, half of which is for pensions. A large number for a city of just 477,000 residents and a budget of 366 million. Small Lansing Michigan has figured out to pay its worker pensions it would have to double property taxes. Stories repeated over and over again across the United States.
The question is no longer if there will be more cities going bankrupt, it is matter of whose next. A natural outcome of unions conspiring with politicians to pick taxpayer pockets and the tendency of politicians to bribe taxpayers with their own money. A solemn reminder of the consequences when a society and its leadership forget they have a solemn responsibility safeguard what they have been given and sacred trust to lay the groundwork for future generations as well.
The truth is public sector unions are an open door to corruption where politicians trade taxpayer money for votes. Corruption that now threatens to cripple states and devastate local governments. Unfortunately, everyone pays the price when the devil comes to collect on deals made with soulless politicians.
The American Republic will endure, until politicians realize they can bribe the people with their own money. Alexis de Tocqueville
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