...There’s no way out of this mess that doesn’t involve pain. Taxes will be raised or spending will be reduced. My guess is that spending won’t be cut. So Illinois state taxes will go up. The cost of living will increase, so more young people will leave. This means there will be fewer taxpayers to fund payments to an increasingly older population of retirees.
If this seems familiar, it’s because we’ve seen this play out in Puerto Rico. There, the cost of programs for the aged is also the biggest political cost component. Illinois is slightly behind Puerto Rico in this regard, but it’s getting there. It’s no coincidence that the populations of Illinois and Puerto Rico are shrinking.
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