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Will Chicago Follow Detroit in Bankruptcy?

An editorial earlier this week in Investor's Business Daily suggests that Chicago "is on path to be the next Detroit," saying specifically (HT Betsy's Page):

"Chicago appears to be following Detroit's lead to financial disaster, perhaps the latest victim of decades of one-party rule by Democrats eager to redistribute wealth while driving real wealth creators out of cities.

"Moody's Investors Service downgraded the Windy City's credit rating by three notches last week, partly the result of $19 billion in unfunded pension debt, leaving Chicago's lower than 90% of Moody's public finance ratings.

"Among the nation's five largest cities, Chicago has put aside the smallest portion of its looming pension obligations, according to a study issued this year by the Pew Charitable Trusts.

"The condition of Chicago's four city employee pension funds is growing desperate."

The city's financial situation isn't healthy, either. According to the IBD editorial:
"As the Chicago Sun-Times reports, year-end audits showed Mayor Rahm Emanuel, the former White House chief of staff, closed the books on 2012 with $33.4 million in unallocated cash on hand, down from $167 million the year before, while adding to the mountain of debt piled on city taxpayers.
 
"Emanuel's recent financial forecast predicted a $369 million financial shortfall for the city's 2014 operating budget. The report also predicted a deficit of more than $1 billion by 2015, driven by pension liabilities."

The editorial closes by pointing out, "(p)eople are fleeing in droves, voting the only way they can in a one-party town — with their feet. From 2000 to 2009, Chicago's population shrank by 200,000 — the only one of the nation's 15 largest cities to lose people." But isn't Arlington County a "one-party town?" Sure is something to think about.

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