[Submitted/published State Journal-Register]
Illinois continues to dominate among the states when it comes to fiscal mismanagement.
We still lead among all U.S. states in cumulative probability of default on our debts, with a 21 percent risk. Globally, Illinois debt ranks between Latvia and Romania in credit worthiness, and worse than Spain and Italy of the economic basket case PIIGS nations. Not company you want to keep.
Now, an Oct. 18 Business Insider article cites a Kellogg School of Management at Northwestern University study awarding our state first place for the most jeopardized pension system.
In August, The State Journal-Register reported that the pension systems have begun selling assets to pay benefits to retirees — around 10 percent annually for some. You may have wondered like me how long that could last. The Kellogg report has the answer:
They predict the pension funds will run dry in 2018. In 2019, the state will have to find an extra $13.4 billion just to pay pension benefits.
I obviously never have much good to say about government in general or state government in particular. When I say the situation is hopeless, but not serious, I believe that’s an accurate economic model for most of us.
You would be wrong, however, to assume I have the same opinion of state workers as I do of what passes for our leaders. They’re my friends, neighbors, acquaintances and customers.
Yours, too. I even appreciate a few things they do, like issuing my fishing license.
It would be presumptuous of me to think these folks aren’t worrying enough about the future. But I’d like to urge anyone whose financial well-being depends on the state fulfilling its fiscal promises to strongly consider this proposition: The situation is hopeless, but also very serious.
You’ve got less than eight years. Please plan accordingly.