Bankruptcy For Illinois May Be A Possible Solution To Save The State

Whether bankruptcy could apply to Illinois and its pension problems would require a ton of legal wrangling. But a federal judge would make tough decisions that politicians don’t have the guts to make on who gets what. It wouldn’t be easy. Public worker union bosses don’t want to take a hit. And big-shot bond investors don’t want to take a hit. Yet what about the rest, the majority of taxpayers who aren’t big bond investors who can get the governor on the phone, or public union bosses who elect governors and mayors? Why should we keep taking the hit, and bleeding, and being forced to leave our homes? Many see this simply as a McConnell ploy, to throw the Illinois Democratic Party’s absurd request for a federal pension bailout back into Illinois Democratic laps. But crisis means opportunity. Years ago, I took heat for saying on a panel discussion at the City Club of Chicago that bankruptcy was a way out for a Chicago without the political will to survive.

Pritzker is pushing for a progressive income tax for Illinois. However, many economists feel a progressive income tax in Illinois will turbo-boost Illinois’ road to bankruptcy.

Politics Versus The Best Interest For Financially Stressed States

What is the difference between politics and the best interest for countries in financial difficulties?

Illinois and New York are the top two states in deep financial crisis. Experts say that raising taxes normally backfire on states that are under financial distress. Ego and not having an open mind is what is driving Illinois, New York, and other states in financial distress. The key is to attract new businesses and taxpayers for states to be financially strong. No new businesses and/or individual taxpayers will be moving to states like Illinois with high taxes. Many police officers, firefighters, and public service workers often leave Illinois once they retire from the government jobs to other states with lower taxes. This is a double whammy for Illinois.

Michael Gracz the National Sales Manager at Gustan Cho Associates said the following:

The problem of course is politics. The Democrats and some Republicans rely on public worker unions — state and city employees — for votes. The politicians take good care of the public worker unions — I’m not talking about union electricians, carpenters, and plumbers, etc. — and the public unions vote the politicians in election time. This is what’s breaking us. I’m not trying to be mean. I’m just trying to be factual. You’ve got one class of workers in this state with guaranteed long-term contracts, with guaranteed pay and guaranteed pensions, that’s a big class. And there’s a second class that doesn’t have any of those protections, the private sector, they’ve lost their jobs (due to the coronavirus shutdown), we’ll be getting to the point where we’ll have close to a million job losses soon, losing pay, and yet they’re still required, right now to continue to pay for that first class. So as long as that system exists, we’ll never get out of it.

This is a breaking story. Gustan Cho Associates will keep our viewers updated on new developments in the coming days and weeks.

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