Where moonbats are in charge, they throw gargantuan sums of money at all things left-wing. New York City offers illegal aliens free healthcare and phones. New York State provides them with free college. California may give out $800 billion to reward a loyal Democrat constituency for being black. Philadelphia will pay women $1,000/month to be pregnant. An Oregon bill would pay derelicts $1,000/month to be homeless. State and municipal Democrats spend as if they will never have to pay their own bills — because they won’t. Who will pay it? Everyone:

The balance-sheet risks for mismanaged states and municipalities have been hiding in plain sight just as they were at Silicon Valley Bank. Continued financial-market turmoil and a prolonged economic downturn could cause some pension funds to collapse and cities to declare bankruptcy.

Interest rates were too low for too long, encouraging irresponsible spending.

When borrowing is dirt cheap, why not max out the taxpayer credit card?

However, inflation caused by Biden’s looting spree put an end to the party. Now comes the hangover:

A report by the research shop Equable estimated that the 228 largest public retirement systems were running a $1.4 trillion unfunded liability at the end of last June.

The bluer the jurisdiction, the more wasteful spending, the deeper the hole.

Chicago’s four pension systems have only enough assets to cover about 25% of what they owe workers and retirees, which is less than Detroit’s pension funds had when the Motor City declared Chapter 9 bankruptcy a decade ago.

Dysfunctional Detroit serves as a model for other single-party Democrat jurisdictions.

Insolvent cities could declare bankruptcy, but states as a matter of federal law can’t. That means their taxpayers will inevitably have to pay more to cover the pension shortfalls. In Illinois 25% of general tax revenues pay for pensions. Many states—including Illinois—can’t afford to bail out their underwater cities, but they also may not want the stain of allowing them to go bankrupt.

The most likely outcome: A cascade of bailouts by some combination of U.S. taxpayers, the Fed and municipal bond investors. Democratic-run states and big cities are simply too politically important for the Biden administration to let fail.

The appeal of liberalism is that it forces someone else to pay. That someone else is all of us.

On a tip from Varla.

One Response to “State and Municipal Democrats Will Stick Us for the Bill”

1. State and Municipal Democrats Will Stick Us for the Bill – Whatfinger Community says:

   April 5, 2023 at 6:39 am

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