The state of Illinois is broke.
Illinois doesn’t have a budget and is entering its third year without one. The cumulative total of the state’s unpaid bills now surpasses $15,000,000,000! It is spending roughly $600 million more a month than tax revenue to cover it. Illinois is not only hemorrhaging money, it is losing citizens to other states. The taxpayers are demonstrating their disgust with their feet, leaving for greener pastures to places like Texas and Florida, with low taxes, lower living costs and more sunshine.
Democratic Illinois Comptroller Susana Mendoza issued a letter that her office has “very serious concerns” it may no longer be able to guarantee “timely and predicable payments” for some core services. She added that Illinois is “in massive crisis mode” and that “this is not a false alarm” and said the state is “effectively hemorrhaging money.” Bloomberg reports that Chicago’s junk-rated school system just went “no bid” and is paying bond market penalties similar to those seen during the financial crisis.
The Democrats control Chicago and Illinois politics, even though Gov. Rauner is a Republican, the real power sits with House Speaker Michael Madigan, a staunch Democrat. Nothing gets debated or voted on without the permission of the Speaker. The Illinois Democrat Party is even more partisan, and virtually no politician supporting tax or spending cuts or declaring themselves pro-life can expect to survive long in that party. So the economic condition of the state is in crisis.
There is no discussion in the state legislature, the only way the Democrats will come to the table is higher taxes and fees to cover the shortfall. There is no talk of tax or spending cuts; there never is with Democrats. It’s always spend your way to prosperity. Just how well is that working? The sad thing about Illinois is however Chicago goes so goes the state — Chicago is the drag on the state. All the tax revenue money essentially goes to support Chicago and its suburbs, not much gets elsewhere in the state.
Doesn’t this sound familiar? Most cities in economic trouble are run by Democrat mayors; Chicago, Detroit, Flint, St. Louis, Philadelphia, Baltimore, Oakland and Newark. All places where expenditures outpace revenue and never is a spending cut or tax decrease ever mentioned to alleviate the problems. A basic law of economics is the more money people keep in their pockets instead of government treasuries, spending increases business activity, thus cutting taxes increases activity, expanding the economy. In turn, more taxes are paid because of the expanding economy (a rising tide lifts all boats).
Works every time it is tried and allowed to work. In conjunction, creating and following a budget that spends less than revenue coming in create surpluses to pay down debt, fund projects, build roads, improve infrastructure, etc. It is called simple math and common sense. It used to be common, but not any more.
The Democrats rail against “trickle-down economics,” what other system is there, it is all “trickle down!” If you are on disability or welfare, the government supplies you with money or credit to survive. Where does that money come from – the people who are working and paying taxes to the state and federal government, which in turn “trickle it down” to recipients. When you buy something in a store – food, hammer, car, etc. – that money goes to pay wages, taxes, mortgages. It doesn’t stay in a safe under lock and key – it is constantly moving.
How that money is used after it is earned is the problem. Too many of us spend and spend and neglect to save. It’s easier to whip out a charge card in swipe it, adding to our end of the month billing. Our great-grandparents were not spenders, they were savers, only spending what was necessary to live and save the remainder. The government has never in modern times had a surplus. The Democrats will point to the Clinton Administration, but that was only because Social Security was taken out as an expense liability, whereas it had always been in the equation before.
The sad moral of this story is you must live within your means. If that requires cuts, balanced budgets, closing government offices, curtailing services, whatever it takes to get the federal debt balance under control and start to pay down our overwhelming debt – $20,000,000,000,000 ($20 trillion+) worth of debt and mounting.
There is a report out of the “Independent” (British Newsite) which states bankers are increasingly worried a recession could arrive with a vengeance at any time. Just like Illinois, countries could be hit will a world-wide recession. All because we cannot deal with our debt, and this is a world-wide problem. Let’s hope it doesn’t turn uglier than a recession and become a depression.
For those of you who think the federal government will come to the rescue, think again. They can’t even agree on budgets, projects or facing our debt problems. We are more in hock than at any time in our history. What will become of this situation? We are entering an era we have never been in since 1929, and that generation was more united and stalwart than ours today.
Only time will tell. Sorry, I just don’t have faith in my fellow citizens to remain sane and composed during a calamity when it arrives.
The rotting of America from within continues…
