TRIVIA FOR TEENS: Be smart. Win cash. Friday night!
Hard truth about 'soft debt' - My Web Times

Hard truth about 'soft debt'

11/06/2009, 10:09 pm  
Comment on this story | Print this story | Email this story
Scott Reeder, Statehouse Reeder

SPRINGFIELD – Just how deep is the state of Illinois in debt?

The official number is $21.6 billion.

The real number is at least several times that amount.

For example, according to a July 1 report, the state"s unfunded pension liability is $79 billion – which quite obviously isn"t included in the "official" debt numbers.

The state is also $3 billion behind in paying its bills and has made some multi-billion dollar commitments it has not even bothered to create estimates for.

In short, no one – including the politicians spending the money -- knows just how deep Springfield"s sea of red ink really is.

Some folks have taken to calling this numerical discrepancy as "political math." Others blame a lack of accounting standards among state officials.

And still others accuse state officials of perpetual financial wishful thinking.

But the best explanation is more simple: a lack of personal integrity from those who represent us.

Too cowardly to address the state"s fiscal woes, our leaders have chosen to play "make believe" with the numbers.

For example, after the stock market crashed last year and wiped out billions in state pension investments, Illinois lawmakers responded by passing a law that said the state could pretend that four-fifths of the money lost was still there.

By doing so, legislators skewed the funding formula so that they had to pay less to the already underfunded retirement systems of teachers, prison guards, state troopers and other public servants.

There is enough fiscal chicanery going on in Springfield to make any Enron executive blush.

The $21.6 billion "official debt" number is based on what the state is obligated to pay to bondholders.

The other $80 billion plus – that isn"t officially part of the state debt -- isn"t owed to "important people" like Wall Street bankers and investors.

It is what"s been promised to teachers and other public servants for their retirements, owed to medical providers caring for poor folks and due others unfortunate enough to be doing business with the state.

These types of obligations are often treated with a shrug from those we entrust with our tax dollars.

Politicians like to call these commitments "soft debt."

Here"s how one high-ranking legislator described the difference between hard debt and soft debt:

"Hard debt is like when a person borrows from a bank and soft debt is like when he borrows from a relative."

In other words when it comes to paying most of the people the state owes, Illinois government is portraying itself as the deadbeat brother in-law who won"t pay his IOUs.

Ultimately, the burden of paying down the debt racked up by these disingenuous lawmakers falls on taxpayers.

Don"t we deserve better?

  • SCOTT REEDER has been a Statehouse reporter more than 10 years. He can be reached through The Times by e-mailing lonnyc@mywebtimes.com.







 
Print this story