Tobin Compares Illinois to Greece

A press release from Jim Tobin:

Illinois Has Become Another Greece

CHICAGO—The State of Illinois has become an economic disaster-area just like the country of Greece, according to Jim Tobin, President of Taxpayer Education Foundation, and for the same reasons. We can learn by studying what happened in Greece, but will we?

Jim Tobin

Jim Tobin

“The causes and results of the economic insolvency of Greece and Illinois are frighteningly similar,” said Tobin.

“In both cases, the long-term control of both governments by corrupt, left-wing politicians has created a climate of dependency and entitlement, cynically used by politicians to keep themselves in office.”

“Lavish, gold-plated pensions in Greece and Illinois have put both entities beyond the point of no return.

“They literally can’t tax their way out of this dire situation, though the pols in Illinois will try.

“Most of the dollars from the recent 67% increase in the Illinois State personal income tax went into, and are still going into, the state government-employee pension funds.

“Yet these funds are still functionally bankrupt.

“There are now 12,154 Illinois government pensions over $100,000 and 85,893 over $50,000.

“Those are staggering numbers considering the taxpayers who fund these pensions get an average Social Security pension of about $15,000 a year.”

“The recent, anemic ‘pension reform’ bill in Illinois would have accomplished very little, and even it was declared unconstitutional by the state Supreme Court. In Greece, the ‘reforms’ offered by the government were a sham.

“While the Greek minimum retirement age was raised to 62, the so-called reforms allowed older workers to retire with the same lavish pensions as before.

“Most of those planning to retire in this decade were grandfathered and are not subject to the reforms.”

“In Illinois, certain jobs allow and even encourage early retirement with full benefits, due to the ‘strenuousness’ of the job, such as Illinois State Police officers, who must endure the stress of issuing tickets to motorists.

“In Greece, strenuous jobs now include Greek hairdressers.”

Illinois, along with the city of Chicago, and Greece have all kicked the can down the road by borrowing to fund their very generous pensions. When it comes time to pay back the loans, the politicians expect taxpayers to foot the bill.”

“Greece is insolvent and can never recover economically.

“Illinois, and its largest city, Chicago, also have reached this point.

“Only an amendment to the Illinois Constitution can allow true pension reform, and even then, it may be too late.

“The Illinois General Assembly must vote to allow local governments to declare bankruptcy, which would allow restructuring of their debts, including the back-breaking government-employee pension plans.”

“Illinois taxpayers can thank House Speaker Michael Madigan (D), Senate President John J. Cullerton (D), and the former spendthrift Democrat and Republican governors for the desperate situation in which Illinois finds itself.”


Tobin Compares Illinois to Greece — 1 Comment

  1. Pensions dwarf all of our other problems and are emblematic of state and local governments gone wild.

    And the best way to reform pensions is to repeal, in its entirety, via constitutional amendment, the pension sentence added to the Illinois State Constitution on December 15, 1970.

    “Membership in any pension or retirement system of the State, any unit of local government or school district, or any agency or instrumentality thereof, shall be an enforceable contractual relationship, the benefits of which shall not be diminished or impaired.”

    Get rid of that sentence.

    That sentence did not protect pensions.

    Pensions are not better funded today than 1970.

    Many or most pensions are worse funded today than 1970.

    That sentence did not work.

    That sentence emboldened politicians to hike pension benefits that were underfunded.

    That sentence emboldened politicians to short pension contributions and use some of the “savings” to hike salaries, which in turn hike pensions.

    That sentence resulted in the state government issuing pension obligation bonds to fund pensions, a ridiculous idea irregardless of short term gains.

    How many employers in the private sector have borrowed money to fund retirement plans?

    Why should taxpayers bear all the risk of public sector pensions?

    In reality the government workers contributing to and receiving pensions also have risk, just less risk than taxpayers.

    The risk to government workers is a law could be passed to allow bankruptcy, much more likely for local than state.

    Another risk to government workers is the pension sentence could be repealed and their benefits clawed back.

    Because there is only so much money and when taxpayers start feeling pain they may very well exercise their right to change law.

    The taxpayers have been mislead so they have justification to change the law.

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