Fed is Lender of Last Resort for Illinois
Wirepoints reports Illinois set to borrow from Fed’s “lender of last resort” facility a second time
Illinois is set to borrow several billion from the Federal Reserve’s Municipal Liquidity Fund (MLF) for a second time if a new U.S. stimulus package and a progressive tax hike scheme for Illinois don’t come through, according to comments from Illinois Gov. J.B. Pritzker.
Illinois already borrowed $1.2 billion from the MLF earlier this year in an attempt to close some of the state’s 2020 budget shortfall.
The borrowing is significant since Illinois is the only state in the country to tap the MLF. The Fed created the MLF in April to be a “lender of last resort,” where cities, states and other government entities can go if they can’t raise money as a result of COVID-19.
Covid Not The Problem
The MLF is for states and municiplaitioes that cannot raise money due to Covid.
Finances, not Covid are the problem in Illinois.
Illinois’ Alleged Balanced Budget
The Illinois constitution requires a balanced budget.
The Illinois budget is “balanced” by borrowing money year after year.
Governor Pritzker “balanced” the fiscal year 2021 budget by borrowing $5 billion from the Fed.
$261 Billion Shortfall
Year in, year out the numbers keep adding up. Moody’s new estimate of Illinois pension shortfall increases to $261 billion
Moody’s estimates the shortfall in Illinois’ five state-run pension funds will jump to $261 billion in 2020. The rating agency, in “Medians – Pension and OPEB liabilities fell in fiscal 2019 ahead of jump in 2020,” says a drop in interest rates and lower investment returns will worsen Illinois’ shortfall.
Moody’s estimation for all 50 states makes Illinois’ $261 billion shortfall the worst in the country.
Illinois’ shortfalls will be even larger when Moody’s finally releases its 2021 estimates, which will capture the impact of COVID-19 on the interest rate and financial markets. Wirepoints estimated earlier this year that Illinois’ unfunded liability may reach $300 billion under today’s volatile conditions.
Get the Hell Out of Illinois
On October 5, 2019, I commented Escape Illinois: Get The Hell Out Now, We Are
Get Out of this Progressive Socialist Hellhole
We are out of here. Can’t take it anymore.
We pay close to $15,000 a year in property taxes on a home worth about $400,000.
Firm plans in place to move to Southern Utah in 2020.
I am pleased to report we made it to Utah.
But note that It Takes 3 Weeks to Escape Illinois
Why 3 weeks? That’s how long it takes to reserve a one-way U-Haul outbound.
“Everyone is leaving. No one is coming,” a U-Haul agent told us a few weeks ago.
I wrote that on July 10, the day we left.
Yep, summers are hot here but we have already adapted. Love it here and would not go back.
Photography and hiking opportunities are second to none. We just spent a week in Grand Staircase-Escalante National Monument and Capitol Reef National Park.
Will post some images later on Mish Moments.
Mish
It’s funny because I just fled utah because of the influence of the church and being an ex member I don’t want that influence in my children’s lives. I moved the opposite direction as you to des moines where we bought our first house with cash because land is so cheap and the country is very peaceful.
People don’t want to live with Mormons? Is it because they take care of their property, have a low crime rate, and have a good work ethic?
There are far worse people to live around than Mormons.
That’s what Howard Hughes used to say.
It is not just Illinois, it is every City and State where Democrats are in control. Democrats are synonymous with fiscal irresponsibility, graft, and corruption. Their public unions are out of control and encumber tax payers with enormous amounts of debt. If you vote Democrat you deserve what you get, and you should stay where you are, in the mess you created.
Mish – I love Utah too. Especially enjoy Moab.
I think you said you moved to St, George. Have you ever visited Hillsdal UT or Colorado City AZ right next door. Not too far from St. George. These are the homes of the fundamentalist Mormons. It’s interesting just to see the how the buildings are different (very large houses for polygamist families). Colorado City was home to Warren Jeffs before he went to jail.
Illinois’ G O bonds paying 5.45% with maturity in 2045. How long until the bidders push that yield through the clouds?
I see an interesting business for a group of enterprising out-of-work folks. One of you has a large van. All the rest of you approach Uhaul about driving their trucks from wherever back to Illinois. You visit Illinois. You then all hop in the van and go home. Of course Uhaul has to be desperate enough to pay for the service. Alternatively you rent Uhauls in a neighboring state with immigration, pair up with would be escapees, and get them to pay you for the service.
If it a multi-day haul, the van is cheaper than Motel 6. Cha-ching, free housing for a day.
I have not had any problems with mormons. None, unless you count looking for a restaurant on Sunday off the beaten path.
Mormons not an issue at all.
Mish, when I lived in Sonoma County in California I was visiting a friend who needed butter, but she was part of a kid sitting co op so she could not go to the market because she was racking up points in the co op by having a bunch of kids in her house. I said I would go to the market and she insisted I take her car.
It was a Datsun B210 (horrible little POS) with a stick no less. It was about 5, light out but late afternoon. The town of Cotati has streets laid out not on a grid but a hub and spoke. Still when you get to most intersections it is a 4 way stop even if it is more like an X than a +. California right of way still applies.
I was going straight and a car with Utah plates had arrived at the stop the same time I did, he signaled a left. I went because I had the right of way at the same time he made a left because he stopped and I guess right of way means nothing in Utah. He hit me head on. Totaling my friends car.
Here is the rub(s) he was legally blind by California law. But by Utah law he was allowed to have a license.
The cops cited him for failure to yield.
He was at fault.
So insurance should have taken care of this without my friend being inconvenienced right? I mean if law actually worked.
Nah, the mormon church allows the best of their flock to sign their cars ownership over to the church so the church is the owner, and the church is self insured having posted a bond with the state DMV. This save all mormon elite from having to pay car insurance.
So, the mormon church refused to pay the damages in a wreck their driver was cited for as at fault. The damned car was worth maybe 1-2 thousand. The church refused to pay. What was my friend going to do? Sue the mormon church for the loss of her car? They did condescend t pay her $800 but look at the assets of the “church.” Marriot for example. link to en.wikipedia.org
Mish, the influence of the church that runs the state id subtle now, but no less real.
Did you know that the LDS Church was in a scandal over baptizing people posthumously, so that people would not go to hell?
Did you know that the LDS church has more information on you and all your ancestors than Tsar Vladimir? Did you know that they spent over a billion dollars to put all genetic information in a cave in Utah? That they have documented your DNA and ancestry better than you could have paid for.
Mish, you moved there and I hope your future is great, but these people control that state, to the point county welfare agencies pay to them because they automatically qualify for benefits in multiple marriages.
You got away from Illinois debt and bad credit rating, but I think you are about to start to understand why the left is the left.
And I don’t think you will have problems. LDS folks are good people. But the church is a very outsize influence. There are many subtle incentives to join the church in order to fit in and get along….in many workplaces….If you were in business there, marketing yourself to local people, and you were not in the church, you would lose some business. Perhaps a lot of business.
The quirky stuff, coffee and tea hard to come by….but 12 kinds of lemonade available…..that kind of stuff doesn’t bother me. But the Mormons are the world’s most serious missionaries. and they stick together and outsiders eventually begin to feel left out on many levels.
I have never spent much time down south where you are, although one of the kids who went to school in Durango has….and loves the country down there. I see the attraction.
It’s funny because I just fled utah because of the influence of the church and being an ex member I don’t want that influence in my children’s lives. I moved the opposite direction as you to des moines where we bought our first house with cash because land is so cheap and the country is very peaceful.
I love it, the progressive crap holes are going bankrupt, and the very ones drawing the pensions will move to Florida to keep from paying the taxes that support the progressive policies
“I love it, the progressive crap holes are going bankrupt…” It won’t matter if the left controls the 3 branches of the Federal government.
The sooner it goes bankrupt the better.
There are ways to move without a U-Haul.
How mormon is Utah, really?
62% and dropping….but that’s still pretty high…..and you’d just have to spend time there to understand how many ways the LDS religion influences almost any and every aspect of life there.
“How mormon is Utah, really?”
The Mexican restaurants don’t have beer or tequila.
I went to a restaurant that did serve alcohol (seems like the minority of them) and they carded me every time I ordered (all in one night, same table). So I tried to order 2 glasses of wine at once to avoid 2 more cardings… they wouldn’t let me.
dont chat up the loveliness and ease of living to much regarding Utah; your inviting more (there are lot of homeless in Utah already)) homeless, down and out, vagabonds and all the rest who will flock there to set up camp
Everybody I talk to thinks their “homelessness problem” is so bad. Utah’s rate of homelessness is about the same as Texas…..0.01%
Another way to think about it is…that’s 9 people homeless per 100K population. We’re like 33rd and 34th out of 50 states. Something like that. Washington DC is the poster city for homelessness. Theirs is about 10X ours, at 90 something homeless/per 100K population. That’s still not huge. And no individual state is more than about half that much.
To me it’s just a very visible and troubling problem that generates a lot of discussion…..but it’s really SO small a problem. Like many controversial subjects, it has become a political football, that get’s worried about too much, and mostly for the wrong reasons.
Everybody FEELS homelessness is terrible.
In 1933 there were 2 million homeless in the US…almost 2% of the population. What we have now is a drop in the bucket in comparison.
Good luck on keeping out the riff-raff. I said I wouldn’t live there, so I’m not really endorsing anyone to move there.
If you are going to be homeless, do it someplace with nice weather and a good welfare system. That is why the homeless problem is so big in CA.
Utah is lovely. I have spent a lot of time there. I think it would be hard for me to live there, though, since I’m not LDS.
And I have many fine LDS acquaintances..one of whom is famous and one of my favorite professional mentors….and I ski there every year….have for the last twenty years.
I love Sundance, the Homestead Resort, Alta…the Red Iguana….so many places.
I have one married kid in Chicago…they are young, and they have no future there. I expect then to be back here in year or so.
“move to southern Utah in 2020”
For me, personally, way too Mormon.
I need to have an ocean nearby. I love water.
Well they maybe the only state using that particular instrument. All 50 states have state and local pension funds in the stock market or bond market. The Fed has supported all kinds of bonds that have caused a flood of money into stocks. This makes all states dependent on asset values the Fed has created out of electrons.
Does this MLF thing work like the national debt? That is to say, will it never be paid back, just rolled over forever?