Coronavirus Pandemic In Illinois May Trigger Financial Meltdown
This BREAKING NEWS ARTICLE On The Coronavirus Pandemic In Illinois May Trigger Financial Meltdown Was PUBLISHED On March 15th, 2020
Illinoisans get more bad news due to the Coronavirus Pandemic In Illinois.
- Illinois Governor J.B. Pritzker will issue and declare a state of emergency to shut down all restaurants and bars effective Monday, March 16th until March 30th, 2020 due to the coronavirus pandemic
- The effect will take place after business hours on March 16th
- Illinois is one of a handful of states that did not reap the rewards of the booming economy
- Illinois is in a financial crisis due to running negative in funding its pension debts
- Illinois has the second-highest property tax rate in the nation
- Illinois has the highest taxes out of all states in the US
- The state was hurting financially prior to the coronavirus outbreak
- Now, the state is in crisis mode with the coronavirus pandemic
In this BREAKING NEWS Article, we will discuss and cover how the Coronavirus Pandemic In Illinois May Trigger Financial Meltdown in the state.
Coronavirus Pandemic In Illinois Will Cause Financial Havoc In State
There are federal and state mandates with combating the coronavirus pandemic in the US. The coronavirus outbreak is a global pandemic.
- Federal, state, county, and city government is working 24/7 in taking proper steps to constrain the spread of the deadly coronavirus pandemic
- Illinois government officials are rapidly preparing to stop the spread of the coronavirus pandemic with the help of the federal government
- There is no doubt the coronavirus outbreak has taken its tolls in the economy
- The Dow Jones and all other equity markets are in bear territory
- Americans are worried about the country going into recession
- The Trump administration has been very proactive in being transparent and working with company CEO’s, the Federal Reserve Board, and world leaders to avoid an economic crisis here in the US and globally
- Plummeting stocks sent mortgage rates to an all-time historic low
- However, due to fears of a recession, many homebuyers have put their home purchase goals on hold
- What good is buying a home if you cannot afford the monthly payments?
- As the uncertainty of the coronavirus fear continues, it is having a major negative impact on the US economy
- President Trump and world leaders are working together for coordinated stimulus programs and major interest rate cuts
- The Trump Administration is working on a stimulus package that involves tax cuts, 0.0% loans, and extending businesses and taxpayers in filing and paying tax returns
How about the state of Illinois? What is Illinois Governor J.B. Pritzker and his fellow lawmakers doing?
Government Leadership During The Coronavirus Pandemic In Illinois
During times of crisis, government leadership is very important. The Trump Administration did not waste any time in addressing the coronavirus pandemic. President Trump and his administration not only is addressing the virus but are also trying to avoid an economic disaster and recession. He has implemented stimulus measures. However, the state government needs to do its part in protecting its citizens.
Mike Gracz of Gustan Cho Associates has been following the state of the economy of Illinois. He said the following:
And what’s Illinois doing? Even before the virus, lawmakers had no real plan to stop the state’s rapid fiscal decline and they have no plans now. The state is just one step away from a junk rating. Illinois has zero reserves to weather a recession and the only thing in the hopper is a proposed multi-billion-dollar tax hike. The proposed progressive tax, which will inflict even more pain on an economy where home values are falling, out-migration is at record levels and cities are being hollowed out, was a bad idea even before the appearance of the coronavirus. Any impact of a recession – whenever one comes – will only magnify the failures of that tax. We’ve already reported over the past two years that Illinois is the least prepared state in the country, along with New Jersey, for a recession. That’s based on an analysis done by Moody’s Investors Service last year.
Look at the image below:
The rating agency said that Detroit and Chicago are rated as junk-rating by Moody’s.
Economy Prior To The Coronavirus Outbreak
The US economy had an 11-year bull-market without a recession. The Dow Jones Industrial Average hit an all-time high of over 29,000 on February 19th. Unemployment numbers hit a historic 50-year low. February job numbers came in at a whopping 273,000. Many states like Florida, Tennessee, Texas, and many other Republican states were raking in billions in revenues. However, a handful of states including Illinois have been struggling prior to the coronavirus outbreak. The state has done poorly and been running on a deficit during the 11-year booming bull-market. Illinois debts have skyrocketed to record levels.
Massimo Ressa of Gustan Cho Associates said the following:
When the markets began their rally in 2009, Illinois’ official pension shortfall for its five state-run funds totaled $78 billion. Today, the shortfall is nearly $140 billion. It’s hard to think about what the debts will look like when the markets eventually correct. A recession would further expose the fundamental problem with our pension system. Benefit payments are absolute guarantees, but the assets set aside to pay them are unreliable. Who pays when the assets aren’t sufficient? Taxpayers.
Look at the chart below:
Illinois Governor J.B. Pritzker’s only solution seems to be raising taxes. He has increased taxes on all items in Illinois. He has doubled the state’s gas tax. Pritzker also approved raises for state lawmakers. The Illinois governor is proposing changing the state’s flat tax income tax to a progressive income tax system. What this means is he wants to increase income taxes to wealthy Illinoisans. Since J.B. Pritzker took office, a record number of Illinoisans are fleeing the state to other lower-taxed states. We do not yet know the economic impact the coronavirus pandemic will have on taxpayers and businesses in Illinois. However, all signs indicate that J.B. Pritzker is not qualified to lead the state of Illinois. Increasing taxes is not the solution to stimulate the state’s economy.