The Democrat-led city of Chicago is doubling down on its bankrupt policies by announcing that it will borrow an additional $10 billion to try and make up for a $28 billion pension hole.
Now, is that how finances work? I mean, if you have borrowed so much that your monthly bills equal more than your take home pay… can you just go to the bank and get a big loan to make the payments?
No, no you couldn’t. A bank would laugh you out of the building if you tried to do that to solve your own financial woes. Ah, but Democrats don’t think rules apply to them, do they?
Apparently, neither logic, nor good sense reigns in the Democrat-led city of Chicago. Per Breitbart News:
As the pension for Chicago’s municipal workers, including its police and firefighters, continues to spiral out of control, Democrat Mayor and former Barack Obama Chief of Staff Rahm Emanuel is launching a scheme to float an additional $10 billion taxable bond offering, according to Fox Business Network.
Even as Chicago’s bonds have already been rated at junk status, Mayor Emanuel imagines that the new round of bonds could be sold to willing buyers and will earn enough to surpass the city’s interest obligations on the debt.
If the plan is passed, it will become the biggest pension obligation bond ever issued by an American city.
Of course, if the money is borrowed against the bond and the bond does not sell well, it will mean billions more red ink added to the city’s ledgers. Worse, Chicago should already be forewarned about the ineffectuality of the idea since the scheme has failed for cities such as Detroit, Stockton, and San Bernardino, Fox Business reported.
To make this plan an even worse idea, bonds for the Windy City have already been rated as “junk bond status.”
Moody’s Investment Service rated Chicago as junk status in May of this year and two months before that the Fitch Ratings service gave the city a “near junk” rating. So, why would anyone even buy another ill-conceived Chicago bond in the first place?
It is far more likely that Chicago will follow in the failed steps of Detroit, Stockton, and San Bernardino and end up deeper in debt and still having no solution to the pension bomb.
But this is how Democrat policies work. They fail and then their proponents double down on the failure.
Follow Warner Todd Huston on Twitter @warnerthuston.