This $5 Trillion Time Bomb Will Devastate Americans

Authored by Nick Giambruno via InternationalMan.com,

Over 3,000 millionaires have fled Chicago in recent months.

This is the largest outflow of wealthy people from any US city right now. It’s also one of the largest outflows of wealthy people in the world.

But it’s not just millionaires… Every five minutes someone leaves Illinois.

In a recent poll, 47% of people in Illinois said they want to leave the state. Over the last decade, more than half a million people have done just that.

This is the largest outflow of people from any state in the country.

The people who leave are generally better educated, more skilled, and earn more money than those who stay. Entire towns of affluent Illinois refugees have sprouted up in Florida, Arizona, and other states.

Illinois is bleeding productive people.

This is a major warning sign.

Wealthy people are often the first to leave a bad situation. They have the means to simply get up and go. And when they do, they take their money and their businesses with them.

This hurts the local property market and the rest of the local economy.

Many of Illinois’ millionaires own businesses that employ large numbers of people. As they leave, there are fewer people and businesses left to shoulder the state’s enormous and growing financial burdens.

Many of these people are leaving for one simple reason: rising taxes.

Illinois’ leftist tax-and-spend politicians are continuing to increase all sorts of taxes, which were already high in the first place.

The state just passed a 32% income tax hike.

Rising taxes are pushing more and more productive people to make the chicken run… and at the worst possible moment for the state’s coffers.

Illinois is the most financially distressed state in the US. Every month, it spends $600 million more than it takes in. It’s now $15 billion behind on its bills and counting.

Illinois is about to become America’s first failed state.

Even its governor has described it as a “banana republic.”

Today, Illinois can’t pay contractors to fix the roads. It doesn’t have enough cash to pay lottery winners. (What happened to the money it collected selling lottery tickets?)

The state can’t even afford food for its prisoners.

Here are the sad facts. Illinois has:

  • Nearly $15 billion in overdue bills (including $800 million in interest).

  • A $7 billion budget deficit.

  • And an eye-watering $250 billion bottomless pit of unfunded pension obligations.

For perspective, $250 billion is more than the combined market value of Allstate, Boeing, United Continental, and Caterpillar, four large Illinois companies.

This $250 billion tab is one of the worst public pension crises in the US.

It’s also Illinois’ biggest financial problem.

Illinois’ latest income tax hike will bring in an additional $5 billion in revenue. But that won’t do much for its $250 billion pension shortfall.

No tax hike will ever be enough to put Illinois’ fiscal house in order. But higher taxes will push more productive people out of the state. This will only exacerbate the problem.

Illinois already has the worst credit rating of any US state. It’s just a matter of time before it becomes the first state in US history to receive a “junk” credit rating, which signals a higher risk of default.

In the months ahead, it’s a mathematical certainty that Illinois will default on some of its obligations. That’s bad news for pensioners, state contractors, and pretty much everyone living in the state.

According to a former budget adviser to the governor, soon more than 25 cents of every tax dollar collected will go to retired state employees.

Politicians in Illinois—like a number of other distressed states—have amended their state constitutions to prohibit reducing these pension payments. That means taxpayers are on the hook.

No wonder wealthy people are fleeing this sinking ship.

The problem is Illinois’ leftist politicians don’t understand that taxpayers aren’t their personal milk cows.

The state is not a captive market. Taxpayers can vote with their feet. And they already have… in record numbers. Higher taxes will only accelerate this trend and further bankrupt the state.

While Illinois has the worst pension situation, it’s not the only state or city in crisis.

California’s public pension system is also broken beyond repair. It’s $750 billion underfunded.

State pension plans in Connecticut, Pennsylvania, New Jersey, and many other states are taking on water, too.

Unfunded public pension liabilities in the US have surpassed $5 trillion. And that’s during an epic stock and bond market bubble.

Public pensions have long been a financial time bomb… and the fuse is getting shorter by the day.

The inevitable explosion has now become imminent. And it’s going to devastate many Americans.

Unfortunately, most people have no idea how to prepare.

I think everyone should own some physical gold. Gold is the ultimate form of wealth insurance. It’s preserved wealth through every kind of crisis imaginable. It will preserve wealth during the next crisis, too.

But if you want to be truly “crisis-proof,” there's more to do…

How will you protect yourself when this crisis explodes? New York Times best-selling author Doug Casey and I just released a PDF guide that will show you exactly how. Click here to download it now.

Comments

WHATDIFFERENCE… Wed, 08/09/2017 - 18:15 Permalink

Chicago is the next  Detroit. Leave it to Progressives imploding another metropolitan area. I see Giuliani's NY has turned back to shit too. What better reminder of why never let a progressive manage anything you hold dear.

Gatto Wed, 08/09/2017 - 18:18 Permalink

They are just rearranging chairs on the Titantic!   They should go Galt for real, but that requires one not becoming the farm animal of another state that's just not as bad off YET!

silverer Wed, 08/09/2017 - 18:25 Permalink

You stupid, stupid Democrats. You waited WAY too long to increase taxes. Now, there's nothing left to tax. Why couldn't you get smart like the Fat Man in NJ, and pass an exit tax? Especially for millionaires. Tax them 60% of their net wealth to leave. I'm sure they'll keep contributing to your campaigns. What a shit show. Hey all you poor white and black folks out there in Lincoln Land, ready to pay some hefty tax?

HRH Feant2 (not verified) Wed, 08/09/2017 - 18:35 Permalink

Lots of people are going to be mad as hell when they are told take it or leave it: .10 on the dollar.

Cryptobull Wed, 08/09/2017 - 18:40 Permalink

Printing greenbacks they will, to get them out of this mess. But it won't work forever. That is why having some gold, silver and cryptocurrency is a good idea. then you are covered when they inflate the dollar and all the other fiat currency to the moon.

besnook Wed, 08/09/2017 - 18:43 Permalink

too funny. the reason the ghettos got worse instead of better with the civil rights movement is the people left behind were the losers who weren't going to make it under any circumstance. this economic fact turned most legacy urban centers into the shit holes they are today. that phenomenon happening to an entire state will be a sight to see. can you imagine driving across country and having to avoid an entire state that has turned into a ghetto of squalor inhabited with dangerous predators of all races. we will need to build a wall around the state to protect the surrounding states.

Retired Guy besnook Wed, 08/09/2017 - 20:28 Permalink

I detour around California. I don't like their border inspection stations. They might catch me someday over a house plant I forgot to report. Also their little ants crawl into my car while I'm lunching at Taco Time. Little buggers want a ride out of California. Can't blame them. It is so crowded and the air is foul. They also have side xray or something to spy on what is in your car. Cop did it to me in Yreka. Hope he enjoyed my dirty laundry.

In reply to by besnook

Gatto Wed, 08/09/2017 - 18:52 Permalink

"Politicians in Illinois have amended their state constitutions to prohibit reducing these pension payments. That means taxpayers are on the hook."What's the old saying about blood from a turnip?  Writing the impossible on paper does not make it more possible!

DocBerg Gatto Wed, 08/09/2017 - 20:45 Permalink

Actually the Article in question was adopted with the 1970 state constitution.  The main selling feature for that constitution was the repeal of the much hated personal property tax.  A few years ago, the politicians wanted the voters to pass a referendum to allow for a new state constitutional convention.  The public unions smelled a rat concerning pensions, and the more enlightened of us realized that more gun control mischief might also occur, so the referendum went down in flames.The original 1818 Illinois State Constitution specifically allowed slavery at the Shawneetown Salt Works, but the term of service was limited to one year.  I am certain that this provision was strictly enforced.  This is in opposition to the Northwest Ordinance of 1787, that banned slavery in the Northwest Territory.  Illinois started restricting the liberties of blacks in 1828, and by about 1835 had enacted the Illinois Negro Code.The 1847 Illinois State Constitution forbade the importation of blacks into the state.  It also made it nearly impossible to incorporate a state bank in Illinois.  In the 1862 Illinois State Constitutional Convention, the rest of Illinois was already worried about Crook County running roughshod over the rest of the state.  The 1870 Illinois State Constitution is responsible for the proliferation of special governments in the state because it imposed borrowing limitations on local governments.  So, now we have more than 7,000 local governments and special districts.

In reply to by Gatto

Smilygladhands Wed, 08/09/2017 - 19:06 Permalink

I left 2 years ago after 14 years. Glad I got out then but i waited too long. IL will never change so long as the moron voters in Chicago keep voting for their unions and putting the same dumb asses in office.

daveO peippe Wed, 08/09/2017 - 19:29 Permalink

Those economic refugees better build walls and fences around their relocation camps. Once Illinois can't pay the welfare tab the descendants of those who loved Lincoln the most will head back down South as sure as a fly goes to honey.

In reply to by peippe

moonmac Wed, 08/09/2017 - 19:25 Permalink

This state is so fucked up they put out traffic cones on Toll Roads blocking lanes months before they start working except for making deep cut-outs every quarter mile to prevent commuters from driving on it. Our Township System is so corrupt they make our County Government Criminals looks like Choir Boys. Our drainage ditch filled in with sediment so we have rivers on both sides of house when it rains hard. The road superintendent told us we wouldn't be happy with their work and boy was he right. The morons put 24" outlets on 16" sewer pipe so putrid water pools and never goes away. We've had about a dozen home burglaries in just a few years nobody has ever been caught and the Deputy Sheriff refuses to gives us any details at our HOA meeting. When I questioned her about the armed sexual assualt home invasion accross the street that I just happened to see on the news she acted like it was no big deal. Reporting violent crime is bad for public relations.The assholes who cut trees for ComEd threw their ropes and steel hooks on our $8K aluminum fence and dented it. When we complained they butchered ours and our neighbors fruit tree and totally bent a picket.We thought living in an unincorporated area would protect us from all the Gubbermint B.S. Hell no they wanted a permit just to put up landscaping blocks to prevent flood waters from reaching our foundation. The permits stay in your window for months because they never come to inspect. Our whole house generator permit has been on our window for 3 months still waiting to get our $100 Road Deposit back.The only difficult decision is where to move once our house is paid off in 7 years.

allgoodmen Wed, 08/09/2017 - 19:32 Permalink

Where have we seen this before.

Release millions of entitled "refugees" into areas that are still productive

They then vote in their failed policies with their superior numbers destroying the host

Wash rinse and repeat