No kidding. Barron's reports that Susana Mendoza, the Illinois State Comptroller has called this predicament a "state of crisis," partly due to "spending obligations [that] have exceeded receipts by an average of $600 million per month" for at least twelve months. Right now, the state is in debt to a variety of transit companies, social service agencies and other providers to the tune of $15 billion. Some vendors have sued the state to get their money, according to Zerohedge.com. Adding to the pressure of who or what to pay first, has been decisions made by the courts, which have already ruled that state workers must receive their due, as well as anyone who happened to hit it big in the Illinois Lottery, as those payments have also been on hold.
If a regular person misses a single credit card payment, you can bet that irrespective of the hardship that caused the problem, the individual is going to be hit with fees and outrageous interest rate increases. This same unfair usury practices also are borne by the $15 billion in debt owed by the state of Illinois. The Chicago Tribune reports $57 million has already been paid for some "interest on overdue bills." That figure doesn't include another $370 million in interest owed on unpaid bills to the Illinois healthcare system which, as an entity, is also owed another $4 billion for services rendered. Yet all of these missed payments and increased interest rate penalties are nothing compared to what the state of Illinois owes to the pension funds of state workers. According to Chicagobusiness.com, the unfunded liabilities of all of past, present and future retires has ballooned to $119 billion, or about "$10,000 for each man, woman and child in the state."
That $119 billion is owed to "660 government pension funds," reports CBS news, many of which are enrolled in defined benefit plans that "promise workers will receive a specific benefit when they retire." The state workers that could be drastically affected are the core of society: firemen, police, teachers, social and health care workers along with all other state employees. Unlike the city of Detroit, states are not allowed by law to file bankruptcy and it would take an act of Congress for that to be permitted. The current crisis in Illinois has been brewing for some time; the past two years they've been spending and operating without any budget in place at all. This type of debt scenario and the many devastating potentials of a financial debt collapse has long been predicted by Mike Adams in his Health Ranger report.
State lawmakers are now in a special session, and drinking a lot of coffee, until the end of July to see if they can reach consensus on how to move forward. In the meantime, millions of Illinois retirees, working families, state employees and public schools are burdened with a cloud of debt and mismanagement that, reports Illinoispolicy.org, has much less to do with revenue, and a lot more to do with the out of control spending habits of Illinois politicians for the past thirty years.
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