and they're gonna want US to bail them out...
Posted on 08/04/2018 10:01:48 AM PDT by Libloather
Mayor Rahm Emanuel’s financial team is considering borrowing billions of dollars to pour into Chicago’s ailing pension funds — a move they contend could save future taxpayers hundreds of millions of dollars but experts say comes with risk.
The idea is to issue bonds at relatively low interest rates and use the money to reduce the city’s $28 billion in pension debt. The pension funds would invest the bond proceeds and ideally earn returns that outpace the interest the city would have to pay on the bond debt.
Issuing so-called pension obligation bonds would be a first for Chicago, which for years shortchanged four city worker pension funds and is now trying to catch up.
Emanuel’s close friend and confidant Michael Sacks, CEO of the GCM Grosvenor asset management firm, floated the concept Thursday at an annual conference for buyers and raters of city debt, sparking mixed reactions among investors across the nation, according to participants.
(Excerpt) Read more at chicagotribune.com ...
Fifty Shades of Rahm
Chicago Tribune ^ | 10/19/2017 | by John Kass / FR Posted by simpson96
If there’s one guy who’s all about measuring pain and pleasure, it’s Chicago Mayor Rahm Emanuel.Yes, I didn’t believe it either, thinking the Rahmfather wasn’t into pain and pleasure as much as he was into ruling from his iron throne on the 5th Floor of City Hall. But there it was in quotes. “I don’t look to just raise taxes,” he told the Tribune’s Editorial Board this week after proposing even more tax increases. “I look at what do we need to do, what helps us grow the economy, what improves quality of life and then measure pain versus pleasure.”
That’s 50 shades of mayor right there. But whose pain? And whose pleasure? Not Rahm’s pain. Rahm wants to be re-elected. If he isn’t re-elected, he might have to go back to work making millions as an investment banker. Or maybe his brother Ari could find him something at Uber. In the meantime, taxpayers have to feel the pain of more and more taxes, even though many schools don’t work and people are being shot down in the gang wars that City Hall can’t stop.
Chicago taxpayers have been hit hard in the past few years, from hundreds of millions of dollars in property taxes for Chicago Public Schools to hundreds of millions of dollars in city property taxes, millions in water taxes and fees on just about everything.
Emanuel has raised taxes in six of his last seven budgets, and now more taxes, including an increase in the 911 surcharge from $3.90 per phone line to $5. The increase would reportedly go to modernize the emergency and non-emergency calling systems. But what about people who never call 911, not even for a cat in a tree? (Excerpt) Read more at chicagotribune.com ...
Chicago, the Flint of the future.
Flee, flee whilst you can.
I’ve not decided if they’ve claimed to have invented a perpetual motion finance machine, it if this is the financial equivalent of Daylight Savings Time.
Your argument is a circular one: you can’t use gold, because politicians are crooked
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Nope. You can’t use gold because there isn’t enough of it, except it can work temporarily in a crisis if the politicians also agree to behave for awhile. Funny that you have to put words into my mouth.
You’re still ignoring my Bretton Woods example. I wonder why?
Here’s the big question. There are multiple countries in the world that use the fiat US dollar to either stabilize their monetary systems, their economies or both. None use a gold standard. Why is that?
Sanctuary? For Whom?
Townhall.com ^ | August 14, 2017 | Ken Blackwell
FR Posted on 8/14/2017 6:34:26 AM by Kaslin
President Donald Trump issued an executive order to stop subsidizing cities which obstruct immigration law. Chicago filed suit in response. Mayor Rahm Emanuel wants to continue collecting federal dollars while ignoring federal policy.
Chicago is a “sanctuary city.” That sounds nice, kind of like Oskar Schindler protecting Jews from the Nazis. It actually means protecting illegal aliens who commit crimes from being punished and deported. When President Donald Trump took office, some 300 jurisdictions, including 106 cities, actively interfered with federal law enforcement. The Chicago case arose from a drunk driver and illegal alien. Shortly after completing probation for a DUI offense, Saul Chavez ran over and killed Dennis McCann, a pedestrian headed to dinner with a friend. Surely Chavez deserved to pay for his crime. Yet Cook County refused to notify Immigration and Customs Enforcement (ICE) when Chavez was released on bond. Naturally, he fled.
Noted Attorney General Jeff Sessions: “To a degree perhaps unsurpassed by any other jurisdiction, the political leadership of Chicago has chosen deliberately and intentionally to adopt a policy that obstructs this country’s lawful immigration system. They have demonstrated an open hostility to enforcing laws designed to protect law enforcement—Federal, state, and local—and reduce crime, and instead have adopted an official policy of protecting criminal aliens who prey on their own residents.
Responded the mayor: “Chicago will not be blackmailed into changing our values, and we are and will remain a welcoming city.” However, the president didn’t say that Chicago couldn’t continue to protect criminals. Only that it had to do so on its own dime. If the city wants federal dollars, it should comply with federal law. Obviously, many Americans disagree passionately over the issue of immigration. But not in question is the fact that immigration law is made by Congress and enforced by the president.
Many other issues, such as welfare, are best left to states to decide and manage. But not immigration. Ultimately the federal government must decide who is allowed to enter America and under what conditions. What the Constitution does not do, however, is allow the federal government to force states to enforce national law. It is federalism 101. The Supreme Court ruled that the Tenth Amendment prevents Uncle Sam from “commandeering” the states for its own purposes. The result is a good balance. States (which include cities and other localities) cannot override federal policy. They cannot enact statutes inconsistent with national law. That includes who enters America.
However, states retain sufficient sovereignty to refuse to cooperate if they so choose. In this case, some local governments contend that cooperating with ICE discourages those here illegally from cooperating with law enforcement. At the same time, however, as the president recognizes, the Constitution does not require Washington to hand out money to states. Indeed, such transfers can be bad policy, since local politicians have less incentive to be careful with “free money” from Congress. And it is especially bad policy for the national government to underwrite states which seek to thwart national policy.
Hence the Trump administration’s proposal to withhold money from so-called “sanctuary cities.” They still can act as they wish. But they will lose federal funds. There’s some $27 billion at stake for the 106 self-declared municipal sanctuaries for law-breaking. Actually, the administration’s announcement alone was sufficient to scare Miami straight. Florida’s largest city agreed to stop obstructing immigration law enforcement. The more general reaction, however, was for recipients to run to court, tying up the administration’s proposal. New York and San Francisco are but two which say they are going to follow Chicago to the courthouse.
Of course, filing lawsuits now seems to be the “American way.” However, the Founders never intended for judges to rule the U.S. The people voted for political leaders who promised to clamp down on illegal immigration. As in the travel ban case, which is headed to the Supreme Court, where the president likely will be vindicated. In the meantime, some states are acting to back federal law. In May Texas began implementing legislation which bars local officials from withholding immigration information from federal agencies. Bills have been introduced in at least 31 other states to bar cities and counties from becoming sanctuaries to illegal aliens and criminals.
For too long local officials have obstructed federal immigration law with impunity. The Constitution protects the right of states to say no. But the Constitution does not require national taxpayers to subsidize lawbreakers. The president’s message is simple: play ball or pay the price.
Illegal immigration costs Illinois $3.85 billion per year. This number is a low estimate in a particularly low year because of the budget crisis happening in Illinois currently. So let’s put that number in perspective.
Illinois is in a budget crisis and on the verge of bankruptcy. Their state debt is upwards of $64 billion. Their credit rating is a BBB-, which is one notch above a junk/non-investment rating. They are also projected to have their credit further downgraded.
Illinois also has unpaid bills upwards of $15 billion (with $800 million per year just in interest payments) and $130 billion in unfunded pension liabilities. Hell Illinois can’t even fund its lotteries anymore.
Why? Because Illinois can’t pass a budget. This doesn’t mean they stop spending though. In fact, the spending target for Illinois Governor Bruce Rauner is $37.3 billion for the upcoming fiscal year, and the House just agreed to cover $36.5 billion of that. No matter which way you slice it, or what spending bill passes, illegal immigration will eat roughly 10% of that spending.--SNIP--
and they're gonna want US to bail them out...
They truly would be suckers. In the municipal bankruptcies that have occurred here in California, the pensioners have done just fine and the bondholders have taken significant haircuts. No part of my portfolio is invested in municipal bonds.
Why does this plan sound like using ONE NEW credit card to pay off an older credit card???
I know, let's pass it off, with interest, to those who cannot vote against it, and cannot blame us when given the bill because we'll all be long gone!!
BRILLIANT!! Problem clearly solved!!
and with a higher interest rate!
I don’t think you understand the Bretton Woods System. It had little to do with a free-market, and wasn’t a gold standard, except that it only tied the US dollar to gold, and then tied other currencies to the US dollar within narrow trading bands. It established the IMF to draw on a basket of currencies, for those economies that were “out of balance”
British economist John Maynard Keynes, who drafted much of the plan, even called it “the exact opposite of the gold standard”
Bretton Woods was a POLITICAL construct, similar to the Euro of today. Of course, once gold started to flow out of the USA due to never-considered economic conditions when the system was established - rather than discipline the USA with the prescriptions gold was demonstrating, Nixon simply pulled the plug on it all. Regardless, we got the 1970’s stagflation (and Jimmy Carter), and super-high interest rates as a result.
Regarding your “big question:” Why do some countries link their currencies to the US dollar vs. gold, silver or something else? Its a reasonable question. First of all, it is specifically countries that have gone through terrible economic crisis - places like Zimbabwe, Ecuador, and at times, Argentina. If it proves one thing, its that humans and politicians will destroy a paper currency. There is never a paper, fiat currency in the world that has not been destroyed.
The only exception is Hong Kong, which pegs its currency to the US dollar. But Hong Kong is a small city, is not a country and it has no resources. To defend its peg, it must keep an incredible amount of reserves - presently at a huge $1.8 Trillion
Other countries, like China, watch the US dollar for strategic and trade reasons - NOT because it gives their internal economy any advantage. The Arabs use the dollar for oil sales because they buy protection from the USA, very simple.
The US is a super-power for many reasons. The acceptance of the dollar is a CONSEQUENCE, not a cause.
Finally, your words: “You can’t use gold because there isn’t enough of it, except it can work temporarily in a crisis if the politicians also agree to behave for awhile.”
Please explain, its a hugely important question. Its the essence of monetary policy, and you merely give it a throw-away line. I’m willing to consider it, but you have to meet me half-way.
Please explain, its a hugely important question. Its the essence of monetary policy, and you merely give it a throw-away line. I’m willing to consider it, but you have to meet me half-way.
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OK. What’s the question? I will stick to the Bretton Woods system to prove my point. I said right at first that it was a partial gold standard that applied to foreign currency exchange only, which happens to make my point even better.
If there wasn’t enough gold to convert France’s dollars that they wanted to exchange, how could there ever be enough gold to back the entire economy?
If it proves one thing, its that humans and politicians will destroy a paper currency. There is never a paper, fiat currency in the world that has not been destroyed.
...
And there’s never been a gold standard that politicians haven’t destroyed. None exist today, but there are countries that use the fiat dollar as a standard.
Supporting the value of the Hong Kong dollar is the Exchange Fund, one of the world’s biggest war chests at HK$4 trillion (US$513.5 billion).
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Situation: Normal.
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