Today’s SJ-R reported again on Governor Quinn and the Democrat-controlled legislature’s continuing efforts to borrow anywhere from six- to eight billion dollars for past due bills so they can get back to running up more bills they can’t pay.
There’s something I haven’t seen mentioned in any of the ongoing coverage of this maneuver, however, and the cognitive dissonance is making my head hurt. Here’s the pieces — maybe someone can explain how they fit together:
- The Democrats are supported by the unions, including and especially the state employee unions.
- As non-union state workers have been routinely getting left behind, almost every state employee except Quinn and Madigan are either in a union or trying to get in one. Quinn may be a little “iffy.”
- The $8 billion in unpaid vendor bills is devastating Illinois businesses and care providers, but it’s peanuts compared to the unfunded state pension liabilities. The deficiencies — despite recent above-average investment returns and creative accounting (see”Go smooth yourself“, below) — are accelerating as assets are drawn down to pay benefits.
- Illinois remains the state with the highest Cumulative Probability of Default on its bond obligations at 21% — within a whisker of Iraq, Egypt, and Lebanon. So, the market thinks there’s a one-in-five chance that Illinois will default on it’s debts, despite the fact that…
- Illinois is constitutionally mandated to pay principle and interest on debt obligations before anything else. Anything.
- Like pensions. The constitution defines pensions as a binding contract, but they’re still subordinate to bond debt.
So, please explain why the Democrats are intentionally switching billions of dollars of bills from behind, to in front of, pension obligations. And why aren’t the unions screaming?
In the meantime, I’ll just take a couple of aspirin, try not to think about it, and watch the show.