Letter to the editor: Bankrupt in Illinois
The reader may recall that in previous letters I talked about the future possibility of individual states going bankrupt. Well it looks like that has finally happened. Just in the last week it has been publically acknowledged by the comptroller (the person who pays the bills) in the great state of Illinois, that 100 percent of all monthly state revenues are now going (via court ordered payments) to mandated obligations with no money left for any discretionary spending!
On top of this Illinois has over 13 billion in current bills to various entities that cannot be paid. Including over 130 billion in unfunded future pensions! Also, Illinois (like the federal government) no longer has an annual budget, just continuing resolutions with the Illinois state legislature funding the state government for a few months at a time, because its state legislators (like our federal legislators) do not have the character to make the hard fiscal decisions that are required of elected representatives and produce an annual budget.
Now, the difference between a state government like Illinois and the federal government is that states cannot print money in order to fund their obligations. This means that eventually a state that spends more than it receives in taxes (like Illinois) is forced to cut spending radically when it can no longer restructure its debt ie bonds. The federal government however can live in “fantasy land” a bit longer (at the expense of its currency) because unlike states, they can print money (if their central bank is corrupt enough) to fund their irresponsible spending.
In short, if a state goes bankrupt the currency within that state is generally still good. If the federal government goes bankrupt, then the currency used throughout the entire country including the states is often destroyed.
So what happens next you ask? Simple. Rather than the Illinois state legislators leveling with their pensioners and cutting their spending massively so that they can live within their means, they will attempt to juggle their debt payments. After this fails, the federal government will begin to bail them out of their mess. The central government will do this by getting the money from the Fed, who will in turn print it out of thin air (it really is that simple)! So in the end you will have the Federal Reserve not only printing monopoly money to purchase a huge amount of Congresses yearly deficits, (including paying back countries that are dumping our debt which they already do) but also printing a sizable amount of money to bail out states like Illinois that are bankrupt.
Keep in mind that New York and California are sure to follow, as will other states (perhaps Colorado) along with their irresponsible legislators.
I almost forgot to mention that Puerto Rico (a US territory in the Caribbean) is also bankrupt and on the hook for over 70 billion dollars in unpaid pensions etc., and is filing for bankruptcy to restructure its debt payments (states cannot file for bankruptcy but territories can).
Good people, we are just getting started; the great reckoning is at hand! We are beginning to see the unmaking of a once great and powerful country. It’s the spending, can you not see it, the spending! Take hold of your destiny and restore America!
Article five people, article five. [email protected]