Moody’s downgrade: Chicago’s path toward junk

Illinois Policy Institute on Chicago's downgrade by Moody's:

Moody’s action should not come as a surprise. The rating agency has been diligent in measuring the impact of rising pension debt on a government’s ability to repay its debt. Just recently the agency reported Illinois’ state pension debt at $187 billion, nearly double the state’s official estimate of $97 billion. Moody’s takes a more conservative and prudent approach than the state in its actuarial assumptions.

Unfortunately, the city of Chicago’s pension debt is just one part of the crisis facing Chicago taxpayers. The Chicago Public Schools’ operating shortfall and its pension debt are just as disconcerting. Add to that debt of the Chicago Transit Authority, the Chicago Park District and the share of Cook County debt that Chicago taxpayers are on the hook for, and the numbers are alarming.

A recent Institute report put the debt of Chicago taxpayers at more than $61,000 per household. And when Moody’s more conservative approach to pensions is included, that number jumps to $84,000 per household.

Chicago and its sister government will never be able repay the amount of debt and pension obligations currently on their books. Never. And they can’t tax their way out of this problem because people will just flee. People have already been going to the collar counties and Lake County, Ind., for years.

Chicago’s population has now fallen below its 1920 levels.

Yet, strongman Rahm Emanuel says Chicago is "the most American of American cities" !