In a previous post I wrote about the monetary issues plaguing Illinois. Well it has not gotten any better. By the end of June, the state needs to pay over $7 BILLION which it does not have. According to the following article, "Mr. Quinn presented a budget in March that would still leave the state with a $10.6 billion deficit. ". Mr. Quinn is the current governor of Illinois.
So if you think Illinois bares no resamblance to Greece, think again. Once Illinois has to make deep cuts to its budget, will there be people with bricks in the streets. I guess we will see.
But as in Greece the legislature is unwilling to make appropriate changes to how money is spent. Acting in a cowardly fashion, saving their electoral skins, they will defer making important decisions until it is too late.
"Illinois Comptroller Daniel Hynes said in his April report that the state's cash position for the quarter ending June 30 "looks exceedingly difficult." By June 10, Illinois must repay $1.75 billion, plus interest, in short-term borrowing.
Meanwhile, the state still owes billions of dollars to hospitals, universities, social-service providers and others. Mr. Hynes said the state's backlog of unpaid bills probably will exceed $5.5 billion at the end of June."
http://online.wsj.com/article/SB10001424052748703686304575228582377071698.html?mod=WSJ_article_LatestHeadlines
Showing posts with label Illinois pension debt. Show all posts
Showing posts with label Illinois pension debt. Show all posts
Friday, May 7, 2010
Saturday, April 3, 2010
Pension Debt
It is amazing that whereever you turn in the US, there are huge amounts of debt. Besides the federal and state spending, consider pension funds in the various states. Furthermore, these pension finds are guaranteed by state constitutions, which means they MUST payout before payroll and other state obligations.
One of the most debt-ridden entities in the US seem to be pension funds. As we have mentioned in the past states like New Jersey have an acculmated pension deficit of $46B and the city of Chicago alone has a pension deficit of $18.5B. While Illinois itself has a pension deficit of $35B. Other states and municipalities are not necessarily in better shape.
http://articles.chicagotribune.com/2010-03-07/news/ct-met-public-pensions-cost-0308-20100307_1_pension-funds-public-pension-funding-deficit
http://www.chicagobusiness.com/cgi-bin/news.pl?id=8191
And yet the pension funds continue to play Russian roulette with their funds expecting Vegas-like returns. Consider the following item reported in the NY Times. The pension funds "gave" private equity firms $17B just so that they can have illiquid assets.
"The nation’s 10 largest public pension funds have paid private equity firms more than $17 billion in fees since 2000, according to a new analysis conducted for The New York Times, as the funds flocked to these so-called alternative investments in hopes of reaping market-beating returns. [http://www.nytimes.com/2010/04/03/business/03equity.html]
One of the most debt-ridden entities in the US seem to be pension funds. As we have mentioned in the past states like New Jersey have an acculmated pension deficit of $46B and the city of Chicago alone has a pension deficit of $18.5B. While Illinois itself has a pension deficit of $35B. Other states and municipalities are not necessarily in better shape.
http://articles.chicagotribune.com/2010-03-07/news/ct-met-public-pensions-cost-0308-20100307_1_pension-funds-public-pension-funding-deficit
http://www.chicagobusiness.com/cgi-bin/news.pl?id=8191
And yet the pension funds continue to play Russian roulette with their funds expecting Vegas-like returns. Consider the following item reported in the NY Times. The pension funds "gave" private equity firms $17B just so that they can have illiquid assets.
"The nation’s 10 largest public pension funds have paid private equity firms more than $17 billion in fees since 2000, according to a new analysis conducted for The New York Times, as the funds flocked to these so-called alternative investments in hopes of reaping market-beating returns. [http://www.nytimes.com/2010/04/03/business/03equity.html]
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