Illinois wants federal bailout

[rjs330]

So apparently Illinois is looking for a federal bailout. They may have to cut 5% of their budget. I got new for them. A lot of folks have had to cut their budgets a lot more than that.

I say no to state bailouts. Why should the rest if us pay for irresponsible spending? I don't care if it's a red state or a blue one. It doesn't matter to me. States need to figure out how best to spend, collect and allocate their own funding.

That goes for banks too who are too big to fail.

Illinois Democratic governor says if the federal government does not bail out his state, it will face 'nightmare scenario' of a 5% budget cut

 

[essentialsaltes]

This is not something special for Illinois. This is a call for something to help state and local governments nationwide, such as is included in the current bipartisan stimulus plan.

 

[dqhall]

So apparently Illinois is looking for a federal bailout. They may have to cut 5% of their budget. I got new for them. A lot of folks have had to cut their budgets a lot more than that.

I say no to state bailouts. Why should the rest if us pay for irresponsible spending? I don't care if it's a red state or a blue one. It doesn't matter to me. States need to figure out how best to spend, collect and allocate their own funding.

That goes for banks too who are too big to fail.

Illinois Democratic governor says if the federal government does not bail out his state, it will face 'nightmare scenario' of a 5% budget cut

What do you think about the government bailing out airlines, resort hotel owners and small businesses? Florida gets a 6% hotel room tax. Now they have to go without. Some cities are laying off municipal workers including police.

 

[rjs330]

What do you think about the government bailing out airlines, resort hotel owners and small businesses? Florida gets a 6% hotel room tax. Now they have to go without. Some cities are laying off municipal workers including police.

I'm not for the government bailing any business out. It's us who's doing it. Businesses and governments need to figure out how to make it on their own budgets. I understand that when idea of bailing out. We don't want anyone to suffer. But in suffering comes wisdom.

We cannot afford to bail out every person or business that needs it. It's not governments job.

 

[iluvatar5150]

So apparently Illinois is looking for a federal bailout. They may have to cut 5% of their budget. I got new for them. A lot of folks have had to cut their budgets a lot more than that.

I say no to state bailouts. Why should the rest if us pay for irresponsible spending? I don't care if it's a red state or a blue one. It doesn't matter to me. States need to figure out how best to spend, collect and allocate their own funding.

That goes for banks too who are too big to fail.

Illinois Democratic governor says if the federal government does not bail out his state, it will face 'nightmare scenario' of a 5% budget cut

We're in a recession caused by a global pandemic. The decrease in revenues from this is not the result of irresponsible spending. States have less freedom to take on debt than the federal government and less freedom to declare bankruptcy than individuals and businesses. They're positioned worse than most other entities to be able to respond to a significant shock.

 

[Basil the Great]

Yes, the Illinois State Budget has been a mess for many years now, though it is in better shape since the state income tax was raised. If the Constitutional Amendment passes in November to switch IL from a flat income tax to a progressive income tax, that will help some as well. However, it will not totally solve the problem of the IL State Budget.

 

[rjs330]

We're in a recession caused by a global pandemic. The decrease in revenues from this is not the result of irresponsible spending. States have less freedom to take on debt than the federal government and less freedom to declare bankruptcy than individuals and businesses. They're positioned worse than most other entities to be able to respond to a significant shock.

No their not. Do you know the amount of debt the US is in? How about the value of the dollar? No the US can't afford to borrow more money either. Why do we believe the Federal Government can just keep borrowing money with no consequences? We are further in the red than any state is.

 

[iluvatar5150]

No their not. Do you know the amount of debt the US is in? How about the value of the dollar? No the US can't afford to borrow more money either. Why do we believe the Federal Government can just keep borrowing money with no consequences? We are further in the red than any state is.

Cool - if you were living in the 1800's, you might have a bright future as an economist. The rest of us, however, have moved on and developed a somewhat more enlightened perspective on how debt works.

Being "in the red" doesn't mean you're not in a position to weather a shock better than somebody who isn't in debt. If I'm maintaining a $10,000 balance on my credit card every month, that's a lot of debt (for me anyways) - but if I have a $100,000 credit limit, I have more capacity to weather a shock (e.g. significant car repair, modest surgery) than does somebody who has no debt, but pays in cash and has little in reserve.

States, by and large, aren't allowed to accrue debt the way the federal government can. They also aren't able to file bankruptcy with the ease that people and corporations are. When shocks happen (like shutting down the economy to fight the spread of a pandemic), they have fewer tools at their disposal to mitigate the effects.

 

[usexpat97]

Let Illinois secede from the union. Then they can print all the money they want.

 

[Richard T]

Cool - if you were living in the 1800's, you might have a bright future as an economist. The rest of us, however, have moved on and developed a somewhat more enlightened perspective on how debt works.

Being "in the red" doesn't mean you're not in a position to whether a shock better than somebody who isn't in debt. If I'm maintaining a $10,000 balance on my credit card every month, that's a lot of debt (for me anyways) - but if I have a $100,000 credit limit, I have more capacity to weather a shock (e.g. significant car repair, modest surgery) than does somebody who has no debt, but pays in cash and has little in reserve.

States, by and large, aren't allowed to accrue debt the way the federal government can. They also aren't able to file bankruptcy with the ease that people and corporations are. When shocks happen (like shutting down the economy to fight the spread of a pandemic), they have fewer tools at their disposal to mitigate the effects.

You are right but the United States Federal Government is entering into uncharted territory. The credit limit you use as an example is replaced by debt to GDP ratio. When the debt exceeds 100% you know things are tough. So now we are at 104% levels only seen for 1-2 years during WWII. United States Gross Federal Debt to GDP | 1940-2019 Data | 2020-2022 Forecast
What makes this different from the War years, is that there is no war, and the trajectory of the debt has been upward since 2000, so it is not just a pandemic problem. It is a structural problem, that politicians including Trump are spending more and more, and debt is rising faster than GDP. Remember too that GDP can go down as debt is going up, so another serious recession and perhaps the dollar collapses. Essentially the U.S. is already bankrupt. I can say that because if interest rates were not artificially low, they would be unable to pay a real rate of interest. (typically defined as 1-2 percent above the inflation rate.) So though we do not have negative interest rates like some nations, if you put your money in, you will assuredly be able to buy less when you take it out even with the small interest given. Illinois is famous for promising large pensions to state and local government workers. Now those people are retiring and there is not enough funds to pay the promises. Not too mention they are spending more, though it looks like they might take a small cut. Any aid should be linked to pensioners taking some of the hit. I believe their Constitution does not allow this though but that is a big reason why they are broke. When regular police officers make over 100k when retired just from their pension, you know you have a problem when you are not collecting enough to pay for all that and never have.

 

[KarateCowboy]

Cool - if you were living in the 1800's, you might have a bright future as an economist. The rest of us, however, have moved on and developed a somewhat more enlightened perspective on how debt works.

lol

I think this is the part where I'm supposed to be like "Ooooo! BURN!".

Fortunately I'm not in junior high anymore and no longer think that way.

 

[jgarden]

So apparently Illinois is looking for a federal bailout. They may have to cut 5% of their budget. I got new for them. A lot of folks have had to cut their budgets a lot more than that.

I say no to state bailouts. Why should the rest if us pay for irresponsible spending? I don't care if it's a red state or a blue one. It doesn't matter to me. States need to figure out how best to spend, collect and allocate their own funding.

That goes for banks too who are too big to fail.

Illinois Democratic governor says if the federal government does not bail out his state, it will face 'nightmare scenario' of a 5% budget cut

That wasn't the tune congressional Republicans were singing when they provided a $1 trillion tax cut for their wealthy donors in the middle of a "bull market" - in the full knowledge that to further stimulate the economy during good economic times using public funds was fiscally "irresponsible spending!"

Fast forward a few years and these same Republican politicians are now refusing to allocate additional funding to the states - despite the fact that it was their own President who downloaded the responsibility for combating COVID-19 onto the shoulders of the Governors, who hadn't budgeted for this Pandemic!

Given that it was this President and his supporters that were adamant that the states reopen their schools without providing any of the additional funding required to safeguard staff and students - perhaps its now time that these cash-strapped states, like Illinois, respond by giving the White House and the Republicans "a dose of their own medicine!"

By laying off teachers, hospital staff and other front-line workers before the 2020 Election, the Governors could return the favor by shifting the responsibility for essential services, dramatic increases in unemployment, and an economic relapse back into the laps of this President and congressional Republicans - and then watch them scramble!

 

[dqhall]

I'm not for the government bailing any business out. It's us who's doing it. Businesses and governments need to figure out how to make it on their own budgets. I understand that when idea of bailing out. We don't want anyone to suffer. But in suffering comes wisdom.

We cannot afford to bail out every person or business that needs it. It's not governments job.

The current administration is running the highest Federal deficit ever. The national debt is out of control. I wish I knew more about inflation proof investing.

 

[98cwitr]

NC is looking for one too. Cooper pleading to get everyone to participate in the census because population = funding.

 

[iluvatar5150]

The current administration is running the highest Federal deficit ever. The national debt is out of control. I wish I knew more about inflation proof investing.

The S&P 500 isn't technically "inflation-proof" but it consistently returns more than inflation.

NC is looking for one too. Cooper pleading to get everyone to participate in the census because population = funding.

Most states would be, given the drop in sales tax revenue.

 

[Belk]

So apparently Illinois is looking for a federal bailout. They may have to cut 5% of their budget. I got new for them. A lot of folks have had to cut their budgets a lot more than that.

I say no to state bailouts. Why should the rest if us pay for irresponsible spending? I don't care if it's a red state or a blue one. It doesn't matter to me. States need to figure out how best to spend, collect and allocate their own funding.

That goes for banks too who are too big to fail.

Illinois Democratic governor says if the federal government does not bail out his state, it will face 'nightmare scenario' of a 5% budget cut

If the Federal budget is important to you one wonders why you vote republican?

 

[dqhall]

The S&P 500 isn't technically "inflation-proof" but it consistently returns more than inflation.

I have some money in an S&P 500 index fund, etf’s and individual stocks. A family member gave me some 5% bonds. I bought platinum shares.

 

[rjs330]

The current administration is running the highest Federal deficit ever. The national debt is out of control. I wish I knew more about inflation proof investing.

Yeah, government spending has been out of control for a long time. The biggest part of the increase came from Bush I believe. Republicans are nearly as bad as the Democrats.

 

[jgarden]

Yeah, government spending has been out of control for a long time. The biggest part of the increase came from Bush I believe. Republicans are nearly as bad as the Democrats.

Given that none of the states budgeted for COVID-19, what happens when they can no longer pay their teachers, hospital staff and frontline workers and are foced to lay them off in the middle of a Pandemic?

Rates of COVID-19 would spiral out of control, unemployment rates would skyrocket and the any prospects of an economic recovery would collapse - there are no easy answers, but given that this President has delegated the responsibility of combating this Pandemic to the governors, the federal government has a moral obligation to keep the states financially solvent!

 

[cow451]

No their not. Do you know the amount of debt the US is in? How about the value of the dollar? No the US can't afford to borrow more money either. Why do we believe the Federal Government can just keep borrowing money with no consequences? We are further in the red than any state is.

Did you complain when Trump did a Trillion plus tax cut in 2017?