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I had a lot of fun this morning on CNBC.
Rick Santelli invited me on his show to discuss Beware, the Tax Man Has Eyes on You: Potential Hike for Illinoisans is Staggering and a few other recent posts of mine on the plight of Chicago.
If you have not read that post, please do so. Nuveen figures property taxes need to rise by 50% to bail out Chicago pensions in deep trouble. In the video below I explain why 50% will not be enough!
Link if video does not play: Chicago BOE to default?
Three minutes flies by fast. It's very difficult to get everything you intend to say in such a small time window. Actually, Rick went over by 20 seconds, telling the producer in advance he intended to do that.
In the video, Rick asked "How underfunded are Illinois pensions?"
My answer of $130 billion included Chicago and the main Illinois pensions. But it also assumed 7% returns that I am quite certain will not happen. Unfortunately, there was no time to get this all into the interview.
Mark Glennon at WirePoints says the number using new Government Accounting Standard Board (GASB) rules is closer to $220 billion. That number includes all Illinois pensions but also includes unfunded healthcare liabilities of about $57 billion.
I was invited back once a month to discuss the economy. Looking forward to that. This was a lot of fun.
Mike "Mish" Shedlock