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2019-07-13 07:00 by Karl Denninger
in Editorial , 346 references Ignore this thread
Flee IL, CA or NY And Bring Liberalism With You?
[Comments enabled]

Want a prediction you won't like?

Flee somewhere like this:

Chicagoans are buried under so much pension debt it’s impossible to see how their city can avoid a fiscal collapse without major, structural reforms. The futility of paying down those debts becomes obvious when you try to figure out just who’s going to pay for it all.

The total amount of city, county and state retirement debt Chicagoans are on the hook for is $150 billion, based on Moody’s most recent pension data. Split that evenly across the city’s one million-plus households and you arrive at nearly $145,000 per household. 

and try to bring your liberal political crap, which is what led to that problem, somewhere like Texas or Florida and I'll make a prediction: You're going to get shot.

This is the same basic problem with letting a bunch of Central Americans and Africans into our nation who are "fleeing economic and political instability."  You don't flee that unless you are both (a) ball-less and (b) intending to infest somewhere else. 

You broke it so you fight it.  You sat still for it or even egged it on and voted for it originally, so you fix it.

You think everyone who got gang-banged on the other side buying that debt in some cases under false pretense is going to take it lying down?  Nope. 

John Tillman, CEO of the Illinois Policy Institute, and New York-based Warlander Asset Management say the state's record pension bond sale in 2003 and debt issued in 2017 to pay a backlog of unpaid bills were deficit financings prohibited by the constitution.

Who knows how many of those lawsuits will win, but I bet the number is not zero.

The new mayor thinks she can toss it off on the State generally.  Good luck with that too; she may well manage to negotiate something, but if you think it's going to solve the problem, well, no it isn't.

Further, low interest rates -- below market and below federal government spending as a percentage of GDP anywhere across the curve not only encourage all sorts of bubble behavior by everyone they make the pension problem worse at an exponentially-increasing rate because they destroy the ability of said invested funds to earn a safe return.

Heh, I get it.

Really, I do.

Having the conversation with your teacher, firefighter or cop friend who is sucking off all the taxpayers and milking a bankrupt and corrupt system, and screams but I'm entitled so says the state constitution! is a tough conversation.  Explaining to them that you're not going to pay and you're not going to leave either -- you're going to fix it and if they don't recognize and accept that a corrupt and impossible promise is unenforceable you'll EAT THEM is not the easiest conversation to have.  It's even worse if they're not just your neighbor -- but are a family member.

So what?

Think you can just run away?  If you're one of the screwed, sure, if you don't bring the political beliefs and voting record, along with the demands that led to the problem, with you.  But if you do then when you infest your "new" digs with that same crap and collapse that state, city or other economic enclave as a result you can fully expect that the people who are on the other side and there are a lot of them will be holding a BBQ in your honor.

Cut the crap folks.  If you're living in such a place and hold those beliefs then you are the problem.  Fix it there or stay put and enjoy the night fires, because they're coming.  Just like the so-called "migrants"; the most we should offer any of them is a gun and a big box of cartridges for it.  Go fix your own sewer of a political system and if you live in a place where you can't vote to solve it because your leadership is full of brutal dictators then shoot them.

Americans once knew how to take care of this sort of crap; the British tried to run that garbage on us and after warning them several times to cut it out we shot them.  Now we snivel around and allow those in this country who hold these sorts of views to infest cities and states one at a time after they abandon the very sewer they crapped in and made stink in the first place.

Yes, you have the right to live wherever you want in this nation -- but if you poison a second well after the results of your crapping in the first one become evident, and instead of cleaning it up by whatever means you need to you think you can simply go somewhere else and poison other people as you continue to move from place to place, you ought to expect to be dinner.

All that keeps it from happening right now is that we still have a civil society.  At the rate we're going that has a use-by date five or so years hence, and your political advocacy record in your "new place" will be well established by then.

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User Info Flee IL, CA or NY And Bring Liberalism With You? in forum [Market-Ticker]
Captainkidd
Posts: 1406
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Houston, Texas
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Locusts....
Find a field.......
Consume everything....
Leave blight in their path....
Move on to the next field.

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It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning. -- Henry Ford
Radiosity
Posts: 244
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Sunny UK
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Talking of a return on investment and low interest rates, I decided to check the current rates with my current bank. I have two savings accounts, both empty of course, because saving is largely pointless these days, and the interest rates on them are so low it's literally not worth putting money in.

0.2% interest. Wow. Considering both inflation and deficit spending in general, 0.2% isn't even close to enough to keep up. I remember when an ISA was 7-8% here. Those days are a distant memory, heh.
Whitehat
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The People's Republic of New York
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the way that the states and cities try to cover this problem is that they neglect other spending in its place and play financial games including using long term bonds under the guise of some capital improvement. what eventually happens is that the things that get neglected are appealed to the federal government. since money is fungible, they can play the shell game. some cities are considered very important on the world stage in terms of their monetary reach and international investment, so they assume that the feds will bail them out when push comes to shove. in this vein the real fun is going to start when the situation gets triaged and certain metro areas are deemed more equal than others. it might be fun watching one left wing group vs another.

a bigger problem is that the retiree culture is a major cash transfer to certain areas, many desirable. even if said retirees leave their politics in their past, any reduction in their take affects the economy of their new community. some areas are virtually built on the early pension, flush retiree culture.

more interesting is the fact that the generous pension benefits allow many retirees to remain in their working homes if they do not wish to leave their original residence. usually the property tax burden and COLA chases out non-pension, free market retirees.

would like to say that it is going to be quite a show, but it really should be quite a show to finally sort this whole thing out. however, there will of course be some sort of scheme to mitigate it since we never seem to follow the law.

my warning to everyone is to be cautious if you are a magnet area for retirees as Medicare and Medicaid burdens could be the worst, especially if municipal retirement health benefits are the first to get crushed. many play games of asset transfers so that they can qualify for full Medicaid while maintaining original lifestyle. the state component of that is guaranteed to grow.

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Iou
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I deal with lots of people in the ****cago area. They have to constantly increase taxes just to keep status quo. When I bring up the subject every one of them cheer it on. They are all counting on it in one form or another (wife is a teacher, husband works for the city, firm will get work..). They are so tied into the "system" they'll pay anything. This comes down to pure greed to a person. They want what they think is owed to them and you're going to pay no matter what.

The truth:
Karl wrote..
"You're going to get shot."


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Wa9jml
Posts: 411
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DeKalb, Illinois
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Next month I am closing on a really nice house with some acreage and a barn in rural northeastern Iowa.

I certainly will not be taking the Crook County Bolshevik nonsense out there with me! I have worked in 3 different Illinois municipalities, and every single one of them was corrupt. I have lived and worked in a fair number of Illinois counties, and they were all corrupt as hell. So, I learned from these experiences that what is wrong with the Illinois political culture, is that it winks and nods every time corruption is exposed, and that is what is killing this doomed state. Illinois has long since gone beyond peak corruption, and winking and nodding is no longer sufficient to obscure the mountain of filth that has for far too long been swept under a variety of rugs.

I will be moving out there as a heavily armed Tertium Quid. I certainly do not want to bother anybody out there, and will do my best to be a great neighbor. But when public corruption out there is observed, I will be pushing for it to be punished with minimal mercy.
Redjack
Posts: 159
Incept: 2018-01-29

Iowa
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Wife is a IL school teacher. We have structured our retriement plans so we count on getting 0 from her "pension".

She loves teaching, but is slowing getting killed by the politics. She has been a "reverse Gramsci" for years, and is looking for an exit. Sad thing is that leaves the "true believers" in charge.

But you are 100% correct. The Pension plan can not work. We have known it since 2005 when she started teaching in IL. Sad thing is no pension plan can work, and neither will 401K's long term.
Thethinman
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Retired
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I had a friend whom I worked with at our small family camera shop in the late 70's. He moved to LA and started making films for PBS. When he retired, he moved to the small town of Haley, Idaho. After living there for 2 years decided to run for public office and guide them into the promise land of social enlightenment. He was soundly defeated and metaphorically run out of town on a rail. He moved north to Coeur dAlene, but I will not be witness to him trying the same thing there, for I have severed our friendship after hearing him chastise the people of Haley for not electing his holiness into office.
Spaceace
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@Wa9jml- congratulations on bailing out. I sold a condo in Park Ridge (Cook) 6 years back. Unfortunately, I am in Kentucky with its pension issues. At least if I bail here, I wouldnt get hit with the real estate tax on a sale like Illinois has. Trying to get my buddy from Algonquin to get out, but his wife doesnt want to be far from family. I keep telling him Wisconsin is only 20 minutes away. Oh well.
Tickerguy
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Kentucky has a very-clear warning to anyone who is thinking of moving there -- annual value-of-vehicle based car tag renewals! **** THAT ****!

There's plenty more too but that was enough standing alone for me to eliminate it from consideration INSTANTLY as it tells me exactly what sort of horse**** view of "you own something, we'll tax it" the state has.

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Spaceace
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That is so true. I am the proud owner of three old cars. Still BS though. I am watching this pension business closely. If Beshear wins the Gov in November, there will be some pension garbage for sure. There are too many public sector employees for a state this size. My daughter keeps telling me to move to Georgia, I think that place is going to go blue soon though.
Marketpirate
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Texas
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Whitehat wrote...

"my warning to everyone is to be cautious if you are a magnet area for retirees as Medicare and Medicaid burdens could be the worst, especially if municipal retirement health benefits are the first to get crushed."



When you also throw in Pensions, this is one of the main reason I didn't move to Florida. When this thing finally blows, I can see that State taking a huge hit along with others.

I also know many New Yorkers who have grabbed their pensions, and migrated to Florida with their same Liberal voting habits.

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Tickerguy
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Florida likely winds up with a DMZ at roughly Lake Ciry and Tallahassee is burnt to the ground.

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Winding it down.
Flappingeagle
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Quote:
All that keeps it from happening right now is that we still have a civil society.


That can go away awfully quickly. Let's see how the first state-wide pension reduction/default goes. Something tells me that those expecting the pension will pitch a fit but discover that the vast majority tells them to shove it.

As for Florida, north Florida is like the south. Jacksonville and points west, are much different than the rest of the state.


Flap

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Tickerguy
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Oh there's plenty of nasty-diversity trouble in Tallahassee and immediate surroundings. Get 20 miles outside of that town, however -- not so much. That won't survive an hour when things go to ****.

South of Lake City you have a LOT of New Yawk sort of attitudes, although there still are parts of the peninsula that take a dim view of that ****.

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Winding it down.
Speedpolkabrewer
Posts: 2
Incept: 2019-05-12

Green Mountain
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I am living through the influx of liberalism. Here in Colorado we had Tabor to keep the insanity in check, and it worked pretty well for decades. If nothing else, it kept the crazies trapped in Boulder & Denver proper. Now they are reaping what they sowed after decades of voting for tax increases have priced them out of their homes. Combined with the massive inlux of trash from the Midwest & California, my world of normalcy is crashing down.

I have lived in a nice quiet suburb on the west side of the Denver metro area. We voted down every proposed tax increase initiative for 18 years in a row. But this past election it finally tipped. Not one, but three increases passed. And they passed a limit on development recently. That has already proven the need to increase taxes exexponentially in places like Boulder that played the same game. Our legislators are pushing to repeal the protections of Tabor, and sadly will have the votes to do it. I guess it was nice while it lasted. I would bail now, but my wife won't move.
Tickerguy
Posts: 157993
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Yeah, you're ****ed. I look at the Boulder area a long time ago and quickly realized they were going to rat**** themselves -- they did.

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Winding it down.
Jdough
Posts: 111
Incept: 2012-05-04

The Lone Star State
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A ton of these Chicago liberals have moved to Texas I see more Illinois plates than any other lately. Out of all the transplants I've met here the Chicago ones seem to be the most consistently liberal. Many of the Californian ones I've met have been hugely conservative, first thing they do on arrival is head to the gun store for a shopping spree.

That being said, Texas is doomed. Between the anchor babies and the liberal carpetbaggers I wouldn't be hugely surprised to see it in play in the next election. As housing prices keep rising on the coasts I'm not sure anywhere will be safe for people who don't want to live with a bunch of over socialized leftists.

I do think the ultimate plan for States like Illinois and New York is a federal bailout, in their mind I'm sure they think the rest of the country owes them a living for their supposed cultural greatness.

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Emupaul
Posts: 51
Incept: 2013-04-17

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I think my credit union pays .1% interest. Enough for a couple of tacos at Taco Bell every three months. So, pretty much useless for making anything. But hopefully the money is safe there. I mean, if I'm burgled or the place burns... the money can sit there and be eaten by inflation there just as well as under my mattress until I need to have the pump in the well replaced.

My bank's saving account pays .1 also. The CU account has more... Neither send an interest statement anymore.

If either go negative on interest, I'll take the house fire risk.
Tsherry
Posts: 1900
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Spokane WA
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Ththinman: he will fit right in over in Hayden Lake or Coeur d Alene,

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Omne mendacium est.
Happytrails
Posts: 395
Incept: 2008-10-24

Northern California
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We have been thinking about Kentucky. Following our son who lost his home in the Paradise fire and is relocating. When I looked up the car registration, I found information that suggested the 6% fee was a one-time fee with credit for similar taxes paid to a reciprocating state. Fees thereafter were about $25-$30 per year. This is where I saw this:

https://revenue.ky.gov/Property/Motor-Ve....

Since there is no way in hell I would pay 6% per year, can you point me to your information source, Karl? Thanks.
Jocknomore
Posts: 203
Incept: 2009-01-03

Ex-Chicago now Florida
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Moved to Florida April 2014. Sarasota area. A $250,000 to $5,000,00 area. Many of my neighbors are New York firemen and police detectives. $100,000 plus pensions. They tried to control the HOA and the place erupted into chaos. $750,000 is the tops in our immediate neighborhood. Truer words were never written Karl!
Tickerguy
Posts: 157993
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@Happytrails -- that's "sales tax", basically, and everyone does it. The registration or "tag" fee is of course normal too.

No, this little bit of ugly is found here: https://revenue.ky.gov/Property/Motor-Ve....

Ken****You is not the only state that pulls this **** either, and it's not all that easy to figure out what the bill will be in advance of moving there either.

KY is an appropriate abbreviation; unfortunately, they do not provide it for free.

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Winding it down.

Stee_man
Posts: 68
Incept: 2011-12-08

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Radiosity and Emupaul: Get yourself a treasury direct account. You can get a 1-3 month T-bill for a little over 2%. It can be set to automatically rollover a few times. Nothing to get excited about, but those banks paying zero should be put out of business. They are taking your money and keeping that easy spread for themselves.

The yield curve is ridiculous now. One and two month t bills pay a higher rate than anything out to 20 years. Then you get an extra 50 basis points for tying up your money for 30 years.

https://www.treasury.gov/resource-center....
Wearedoomed
Posts: 4407
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slightly red state
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Popular Bank is paying more than 2% interest on a savings account of ours. It took some digging to find it, though.

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Non expedit!
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