Watch Illinois…And Do The Reverse
My beloved State of Illinois is a shining example of what not to do if a state wishes to be prosperous, cursed as it is with probably the worst state government in the Union. George Will sums up the state of my State in a column this week:
After trying to tax Illinois to governmental solvency and economic dynamism, Pat Quinn, a Democrat who has been governor since 2009, now says “our rendezvous with reality has arrived.”
Actually, Illinois is still reality-averse, so Americans may soon learn the importance of the freedom to fail in a system of competitive federalism.
Illinois was more heavily taxed than its five contiguous states (Indiana, Kentucky, Missouri, Iowa, Wisconsin) even before January 2011, when Quinn got a lame duck Legislature (its successor has fewer Democrats) to raise corporate taxes 30% (from 7.3% to 9.5%), giving Illinois one of the highest state corporate taxes, and the fourth-highest combination of national and local corporate taxation in the industrialized world.
Since 2009, Quinn has spent more than $500 million in corporate welfare to bribe companies not to flee the tax environment he has created.
Quinn raised personal income taxes 67% (from 3% to 5%), adding about $1,040 to the tax burden of a family of four earning $60,000. Illinois’ unemployment rate increased faster than any other state’s in 2011.
Its pension system is the nation’s most underfunded, and the state has floated bond issues to finance pension contributions — borrowing money that someday must be repaid, to replace what should have been pension money it spent on immediate gratifications.
Go here to read the depressing rest. Illinois is now rated A2 by Moody’s, the lowest credit rating of any state. When it lowered Illinois’ bond rating Moody’s made the following observation:
Illinois’ general obligation bond rating was lowered to A2 from A1 on January 6 because of the state’s failure last year to implement solutions to its largest credit challenges: severe pension under-funding and chronic bill-payment delays. It remains to be seen whether the state has the political will to impose new pension reforms and other measures that restore fiscal strength in the near term.
Not a chance. No serious reforms will be undertaken until State payroll checks begin to bounce. Illinois has the worst, most feckless political class in the country. Louis XV, he of apres moi le deluge, was a dedicated reformer compared to the idiots, crooks and empty suits who misgovern the Land of Lincoln.
Financing Government Out of Thin Air
In 2011 the Fed purchased 61% of all debt issued by the Treasury Department.
The Federal Reserve is propping up the entire U.S. economy by buying 61 percent of the government debt issued by the Treasury Department, a trend that cannot last, Lawrence Goodman, a former Treasury official and current president of the Center for Financial Stability, writes in a Wall Street Journal opinion article published Wednesday.
“Last year the Fed purchased a stunning 61 percent of the total net Treasury issuance, up from negligible amounts prior to the 2008 financial crisis,” Goodman writes.
Goodman also warns that U.S. economy and markets are “at risk for a sharp correction” if conditions aren’t “normalized.”
“This not only creates the false appearance of limitless demand for U.S. debt but also blunts any sense of urgency to reduce supersized budget deficits.” Continue reading
Why Illinois Is Bankrupt
My beloved state of Illinois has a terrible economy, and a shrinking tax base but that is apparently no problem for the bi-partisan pirates who have been plundering the Land of Lincoln for decades:
When Republican state Rep. Roger Eddy announced his retirement from the House Thursday, you could hear the “ding, ding, ding” of a slot machine all the way from Springfield.
Eddy hit the pension jackpot.
He is retiring early from the House to run the Illinois Association of School Boards, which, among other activities, lobbies the Illinois Legislature. His start date is July 1 — although now that he’s leaving the Statehouse before the end of the spring session, he said it’s likely he’ll work for the association before July.
Why the sudden defection? One likely reason: He’ll be much richer in retirement, thanks in part to taxpayers.
In his new job, Eddy will not only stay in the Teachers’ Retirement System, he can collect more in benefits from it. He has been working both as a state representative and superintendent for Hutsonville Community Unit School District 1. He has been part of TRS through his Hutsonville job, where he earned a salary of $107,400. His new salary is expected to be at least $200,000, and his pension will be based on that.
Illinois Statehouse News reported that Eddy’s pension as school superintendent would have been about $70,500 a year. It will climb to at least $141,000 in his new job. His predecessor at the IASB, Mike Johnson, is earning an annual pension — get ready to swallow hard — of $193,273, according to TRS.
But that’s not the end of Eddy’s pension largesse. He’ll be eligible in two years to begin collecting a pension of about $24,000 a year from his nine years of part-time work in the Legislature. Illinois Statehouse News projected his lawmaker pension carries a lifetime value of $584,273. Eddy is 53 years old. Continue reading
The Obama Record: The Debt
The second in my ongoing series on the Obama record as President, the first part of which may be read here, leading up to the election in November. Few things show more graphically the disaster of the Obama presidency than the debt he has piled on this nation. This week the Obama Debt reached a grim milestone, as he surpassed the debt run up by his predecessor George W. Bush in eight years. That right-wing news organization CBS News, gives us the forbidding numbers: Continue reading
The Debts of the Parents Will Be Visited Upon the Children
Unfortunate indeed is the country that forgets this sage piece of advice from Mr. Micawber: Continue reading
Rand Paul Gets It
I have never been a fan of Ron Paul, to say the least, but I am rapidly becoming a fan of his son.
This year the federal budget deficit will be an estimated one and a half trillion dollars and that is probably on the low side.
Senator Rand Paul of Kentucky voted against both proposals because he believes that neither are serious attempts to come to grips with the sea of red ink which is threatening to destroy this nation’s future prosperity. He is absolutely correct.
He has proposed 500 billion dollar cuts. This would be a serious start, but would still leave a deficit this year of a trillion dollars. Here, hattip to David Fredosso at the Washington Examiner, are the details of his plan: Continue reading
Government and Economic Health
Another fine econ 101 video from the Center for Freedom and Prosperity. The day after we learned that the Federal debt now equals the annual size of the US economy seems like an appropriate time to watch the above video. We have attained a size and cost of government in this country which threatens to severely damage the economy which pays our bills, public and private. This cannot go on and will not go on, either by our elected representatives finally taking steps necessary to curb the size and cost of government or through de facto national bankruptcy.
Night of the Living Government!
In keeping with the mini-Zombie theme I have started here at TAC, we have the above Klavan on the Culture episode from 2009. Hmmm, Zombies as metaphor for out of control government spending. Actually I do not think it is apt. After all, a horde of ravenous Zombies might eat a few brains, but they would quickly be dispatched to the nether regions since, if Hollywood can be trusted, Zombies are notoriously poor combatants, moving slowly, clumsily, and giving away their positions with incessant growling. When confronting zombies, the only thing we have to fear is fear itself! (Plus running out of ammo.) Continue reading






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