There is a mass exodus from Illinois.
According to the US Census Bureau, the Prairie State lost a net 33,700 residents in fiscal year 2017. More people bailed out of Illinois than any other state in the US. And based on calculations the folks over at ZeroHedge worked out, the exodus was even worse than the Census Bureau numbers indicate.
Of course, the net population loss masks the true gross outflow of Illinois residents as it doesn’t account for natural births/deaths. Assuming that Illinois has the same natural population growth as the US as a whole (0.7%) implies that the state lost a staggering ~125,000 residents in aggregate, or roughly 1 man/woman/child every 4.3 minutes.”
So, why the big rush to bail out of the great state of Illinois?
Could the country’s pension mess be more widespread than we even realize?
Martin Armstrong of Armstrong Economics thinks so. He says, “under no circumstances assume that any government pension will actually be paid.”
And he means even government pensions in states now considered economically sound.
Lawmakers in Illinois appear on the verge of passing the state’s first budget in two years. The measure includes a $5 billion tax increase on the good people of of the state. But the Illinois’ finances are in such a mess, even that may not be enough. It looks likely that even if the politicians get things done and finally pass a budget, the state still may find its credit rating downgraded to junk.
This shows just how bad things are in the Land of Lincoln. Let this sink in for a moment – the state is so far in debt that not even a $5 billion income tax increase can’t put its fiscal house in order.
Illinois’ credit rating is on its way to “junk” status.
According to an AP report, S&P Global Ratings recently warned it will likely lower Illinois’ creditworthiness to below investment grade if feuding lawmakers fail to agree on a state budget for a third straight year.