Welcome To The Third World, Part 24: Illinois About To Default?

Thursday, June 29, 2017
By Paul Martin

By: John Rubino
GoldSeek.com
Thursday, 29 June 2017

The train wreck that is the state of Illinois has generated a lot of questions lately, including “Will its government ever pass a budget?”, “Will it ever pay its overdue bills?”, and “Is it possible for a state to go bankrupt?”

Looks like we’re about to get some answers to these questions, along with one more: “What happens to the financial markets when people finally realize that Illinois is far from the only impending bankruptcy?”

Today’s Wall Street Journal has an anecdote-filled article illustrating what certainly looks like a case of terminal financial mismanagement (How Bad Is the Crisis in Illinois? It Has $14.6 Billion in Unpaid Bills):

Among the many, many data points:

The state comptroller predicts unpaid bills will soon top $16 billion. “It is almost hard to say those numbers out loud because they seem so insane, but that’s where we are right now.”

Unfunded pension liabilities now total $250 billion. That’s about one-third of state GDP, and is in addition the myriad other debts taken on in recent years.

S&P Global Ratings has warned that it could lower the state’s rating to junk as early as this week if a budget isn’t passed.

Peoria-based OSF Healthcare, a network with 10 Illinois hospitals, is owed about $115 million for bills over four months old, the equivalent of 18 days of operating expenses.

The state owes Illinois dentists $225 million. Some dentists with lots of state workers are selling receivables to keep the lights on. Others are asking state employees to pay in cash.

The state owes two Springfield hospital systems more than $200 million.

The Coliseum building at the state fairgrounds closed indefinitely earlier this year after the state failed to fund needed repairs.

The Rest…HERE

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