S&P Downgrades Illinois Credit Again
2nd September 2012
Standard & Poor’s downgraded Illinois’ credit rating on Wednesday, citing “weak pension funding levels and lack of action on reform measures.” S&P also gave the state a “negative outlook.”
The agency lowered Illinois’ rating from A+ to A. This is the 10th time Illinois’ credit has been lowered during Democratic Gov. Pat Quinn’s tenure and will potentially cost Illinois taxpayers because the state may have to pay more when borrowing money.
Of course, that wouldn’t matter if the state didn’t have to borrow money. Unfortunately, with Democrats in charge, borrowing money is one of the few tools in the state government’s toolbox. And, as Margaret Thatcher famously observed, eventually you run out of other people’s money.
Walter Russell Mead, a scholar who is one of the foremost critics of the so-called “blue state” model, wrote Democrats who defend such an unsustainable governance model — like the one in Illinois — should not be taken seriously.
“With public-sector unions fighting tooth and nail to preserve their cushy benefits and expensive pension plans, old style Dems like FDR, Harry Truman and Fiorello LaGuardia—all of whom thought that public sector unionism was a terrible idea—are looking smarter and smarter all the time, Mead wrote. “The combination of collective bargaining and the power of a focused voting lobby and campaign finance machine has unbalanced the budgets of too many cities and states to retain much appeal to the general public.”
“Blue State = Red Ink” is the prevailing fundamental equation of our time.