Gary Christenson | Oct 02, 2015 02:19AM ET
Per Mike Shedlock (Mish):
The State Comptroller estimates that the backlog of unpaid bills will exceed $10 Billion by December. Worse, “In January [2015], Illinois’ total cumulative liability was $159 Billion.”
“Pay-Later Budgeting” has not worked. “… the state of Illinois has run deficits in every fiscal year since 2001.” The state borrowed, sold assets, underfunded retirement plans, borrowed even more money to fund retirement plans and yet pretended all was well.
Borrowing today increases the strain on future budgets and reduces available funds for future pensions, salaries, benefits, general expenses, and payoffs. Eventually the “piper will be paid.”
Mish has more to say but the message is clear.
It is worth noting that the members of the Illinois legislature increased their wages in the midst of this management disaster, and are paid, even without passing a budget.
Back to the important question: Where is the gold rush? Retirees, future retirees and current state workers should realize that they will inevitably lose benefits and jobs while their taxes and expenses increase. Gold, not the legislature nor the politicians, will protect their purchasing power.
But strangely, there seems to be no gold rush in Illinois for protection against their legislature, pension underfunding and loss of purchasing power.
h3 MORE PARALLELS BETWEEN ILLINOIS AND SOVEREIGN GOVERNMENTS:/h3There are similarities between the state of Illinois (and others) and the US government, Greece, Spain, Italy, the EU, the UK and Japan.
Where is the gold rush? Apparently the only rush to buy gold in any large quantity exists in Russia, China, and India, but not Illinois, the UK or the US. That will change as the consequences of bad policies are realized.
Illinois (like many other states) is facing an ugly financial future. Illinois can’t “print” money to pay their bills so eventually horrible adjustments will be made. Sovereign nations such as the US, Japan, and the UK can “print” their currencies until others refuse to accept payment in those currencies. This delays, but does not eliminate, the inevitable consequences and implosion.
CONCLUSIONS:
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