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You aren’t taking a new mortgage every year though.

ceejayoz 5y ago
Neither is Chicago. "Chicago's annual revenue is $11 billion but its pension credit card debt is $33 billion." Comparing annual revenue to total pension liabilities is silly. (As is calling it "credit card debt" to make people think it's incurring 20% interest penalties. That's a deliberate choice to prompt a false impression when reading the article, IMO.)
- toomuchtodo 5y ago
  Chicago's pension debt continues to expand while its revenue is in peril [1] [2]. They will eventually need to reduce services and maximize revenue transfer to these obligations if they're unable to default or renegotiate them. Typically, your mortgage balance does not grow more rapidly than your household income (unless you have a negative amortization mortgage). The state attempted to pass a progressive income tax [3] increase to help fill some pension gaps (with PR help from the governor's own finances to the tune of ~$56 million), but it failed, and those dollars have to come from somewhere (income tax, property tax, etc). [1] https://news.wttw.com/2021/07/07/chicago-pension-debt-increasing-11-billion-2020-city-analysis https://news.wttw.com/2021/07/07/chicago-pension-debt-increa... (Chicago’s pension debt soared by approximately $1.1 billion in 2020, according to the city’s audited annual financial report for 2020.) [2] https://wirepoints.org/new-irs-migration-data-illinois-third-biggest-loser-of-people-biggest-loser-of-incomes-to-other-states-in-2019-wirepoints/ https://wirepoints.org/new-irs-migration-data-illinois-third... (New IRS migration data: Illinois third-biggest loser of people, biggest loser of incomes, to other states in 2019 – Wirepoints) [3] https://www.nbcchicago.com/news/local/chicago-politics/illinois-lt-gov-stratton-warns-of-20-income-tax-hike-if-graduated-tax-proposal-doesnt-pass/2344707/ https://www.nbcchicago.com/news/local/chicago-politics/illin... (Illinois Lt. Gov. Stratton Warns 20% Income Tax Hike Possible if Graduated Tax Proposal Doesn't Pass)
  - ceejayoz 5y ago
    > Chicago’s pension debt soared by approximately $1.1 billion in 2020, according to the city’s audited annual financial report for 2020. So, by about 3%, and about 10% of annual revenue. (In an... unusual year.) Buy a house and chances are your debt soars by more than 10% of annual salary, right?
    - toomuchtodo 5y ago
      I don't believe you're making an accurate comparison between a household balance sheet and unfunded pension liabilities Chicago (and Illinois) have.
      - ceejayoz 5y ago
        The point: As with a mortgage, Chicago's pension liabilities are due over years, not all at once. That makes comparisons like "$11B annual revenue, $33B pensions" disingenuous.

Neither is Chicago. "Chicago's annual revenue is $11 billion but its pension credit card debt is $33 billion." Comparing annual revenue to total pension liabilities is silly. (As is calling it "credit card debt" to make people think it's incurring 20% interest penalties. That's a deliberate choice to prompt a false impression when reading the article, IMO.)

toomuchtodo 5y ago
Chicago's pension debt continues to expand while its revenue is in peril [1] [2]. They will eventually need to reduce services and maximize revenue transfer to these obligations if they're unable to default or renegotiate them. Typically, your mortgage balance does not grow more rapidly than your household income (unless you have a negative amortization mortgage). The state attempted to pass a progressive income tax [3] increase to help fill some pension gaps (with PR help from the governor's own finances to the tune of ~$56 million), but it failed, and those dollars have to come from somewhere (income tax, property tax, etc). [1] https://news.wttw.com/2021/07/07/chicago-pension-debt-increasing-11-billion-2020-city-analysis https://news.wttw.com/2021/07/07/chicago-pension-debt-increa... (Chicago’s pension debt soared by approximately $1.1 billion in 2020, according to the city’s audited annual financial report for 2020.) [2] https://wirepoints.org/new-irs-migration-data-illinois-third-biggest-loser-of-people-biggest-loser-of-incomes-to-other-states-in-2019-wirepoints/ https://wirepoints.org/new-irs-migration-data-illinois-third... (New IRS migration data: Illinois third-biggest loser of people, biggest loser of incomes, to other states in 2019 – Wirepoints) [3] https://www.nbcchicago.com/news/local/chicago-politics/illinois-lt-gov-stratton-warns-of-20-income-tax-hike-if-graduated-tax-proposal-doesnt-pass/2344707/ https://www.nbcchicago.com/news/local/chicago-politics/illin... (Illinois Lt. Gov. Stratton Warns 20% Income Tax Hike Possible if Graduated Tax Proposal Doesn't Pass)
- ceejayoz 5y ago
  > Chicago’s pension debt soared by approximately $1.1 billion in 2020, according to the city’s audited annual financial report for 2020. So, by about 3%, and about 10% of annual revenue. (In an... unusual year.) Buy a house and chances are your debt soars by more than 10% of annual salary, right?
  - toomuchtodo 5y ago
    I don't believe you're making an accurate comparison between a household balance sheet and unfunded pension liabilities Chicago (and Illinois) have.
    - ceejayoz 5y ago
      The point: As with a mortgage, Chicago's pension liabilities are due over years, not all at once. That makes comparisons like "$11B annual revenue, $33B pensions" disingenuous.