Chicago is working hard to become the next bankrupt American city

Dollar SignFaced with high crime, high taxes, failing schools, and an out-of-control pension system for everyone, what would you do? Residents Abandoning Chicago: Is It Following in Detroit’s Footsteps? – Hit & Run : Reason.com The subtitle is “Illinois’ sources of revenues are leaving as government employees keep demanding more, more, more.”

I loved that city once upon a time. But I won’t even go into the city when I visit family in northern Illinois. It is too crazy and too expensive. (It currently costs $21 per hour to park in some of the downtown garages.)

So anyway, the good folks of Chicago are leaving, not in droves perhaps, but Chicago had its first population decline in a long time (data presented only goes back to 1990).

The biggest loser in the latest demographic analysis is the city of Chicago. Of all the metropolitan areas that lost population in the last year, it lost the most—more than the greater Los Angeles area, more than Boston, more than Minneapolis.

The city’s finances are a mess, and getting worse. Sales tax is already above 10 percent in Chicago. How high can it go? Property taxes are also high, and likely to go higher. The Illinois constitution doesn’t give the city any leeway to solve the pension problem (the State Supreme Court just struck down a proposed compromise). They are basically screwed.

Steven Greenhut noted, “Chicago has high taxes and punitive regulations, large and bureaucratic government, and surly public-sector unions. But the depth of the city’s problems is mind-boggling, and the results of a fiscal disaster there will be far more spectacular than bankruptcy in more obviously decrepit cities.”

And in the middle of all of this, the Chicago Teachers’ Union has just voted for a 1 day strike on April 1st. It may be an illegal strike, but that doesn’t seem to bother the union.

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3 thoughts on “Chicago is working hard to become the next bankrupt American city

  1. Thanks for this blog post regarding Chicago’s impending bankrupcy; I really enjoyed it and am definitely recommending this blog to my friends and family. I’m a 15 year old with a blog on finance and economics at shreysfinanceblog.com, and would really appreciate it if you could read and comment on some of my articles, and perhaps follow, reblog and share some of my posts on social media. Thanks again for this fantastic post.

  2. Actually its $21 for the first hour and then builds from there but that’s still crazy money. A garage near where I work in the Loop charges even more for the first hour @ $28.

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