August 31, 2012

BLUE-MODEL FAILURE UPDATE: Illinois Bonds Downgraded over Pension Crisis. “Illinois taxpayers are facing huge liabilities for their state’s bloated, poorly managed, and underfunded pension system, and public sector workers face an uncertain future, as taxpayers are unlikely to cough up the huge sums required to make good on the debt. Now everything is getting worse: S&P has downgraded Illinois bonds, meaning that the interest rate on the state’s huge debt is likely to rise, squeezing the state treasury even further. . . . With public-sector unions fighting tooth and nail to preserve their cushy benefits and expensive pension plans, old style Dems like FDR, Harry Truman and Fiorello LaGuardia—all of whom thought that public sector unionism was a terrible idea—are looking smarter and smarter all the time. The combination of collective bargaining and the power of a focused voting lobby and campaign finance machine has unbalanced the budgets of too many cities and states to retain much appeal to the general public.”