ILLINOIS WILL BE TEST AS TO HOW TO DEAL WITH GOVERNMENT FINANCIAL IRRESPONSIBILITY
CALIFORNIA MAY BE NEXT
Illinois is now in imminent danger of descending into a death spiral. The state has $250 billion in debt. It spends $3 for every $2 in revenue. It is now reported to be as much as $14 billion behind in paying its current bills. It has an 11% unemployment rate. Corporations are relocating out of the state and the state has lost 78,000 in population in the last 3 years. It is borrowing to pay its pension obligations as the fund can only pay 40 cents on the dollar paid. It has 6000 retired teachers receiving over $100,000 in benefits a year and many retired administrators are receiving over $250,000 a year.
The legislature is now focusing on how to expand health care benefits in the state. It seems that they feel there really is not a problem.
There is really no provision for states to declare bankruptcy. If it fails to pay its bond holders and looses its ability to borrow it can be declared a failed state by the federal government. It can then be placed into receivership and a administrator appointed to make the cuts necessary to bring the state into financial health. It can also loose its statehood and be place back into a territory status. This would be for not living up to its constitutional obligations required for statehood. While Illinois is the worst state in the nation for financial responsibility, there are others not too far behind.
California has recently passed a single payer health care bill in the senate. It will cost an estimated $400 billion. This is more than its present budget. It is expected to be financed by a additional 15% tax. Can anyone predict the results of human action. Many leaving the state and also many more consumers of health care moving into the state. Both Illinois and California have opened the door to illegal immigrants to replace those fleeing their states. While this may help them by receiving more federal aid, it will in the long run replace their high skilled workers with those requiring even more benefits. The next recession will push many of these states over the edge.
California has recently passed a single payer health care bill in the senate. It will cost an estimated $400 billion. This is more than its present budget. It is expected to be financed by a additional 15% tax. Can anyone predict the results of human action. Many leaving the state and also many more consumers of health care moving into the state. Both Illinois and California have opened the door to illegal immigrants to replace those fleeing their states. While this may help them by receiving more federal aid, it will in the long run replace their high skilled workers with those requiring even more benefits. The next recession will push many of these states over the edge.
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