Moody's Downgrades Chicago's Credit Rating

moodys-chicago-credit-ratingIn a sad but not altogether surprising move, Moody’s Investor Services has downgraded Chicago’s credit rating from A3 to Baa1.  According to CBS Chicago,

“Moody’s gave Chicago a negative outlook indicating another downgrade could occur if there’s no pension fix. Moody’s says the rating “reflects the city’s massive and growing unfunded pension liabilities.”

The rating is only 3 notches above junk bond status.  Also, the rating puts Chicago’s credit rating at the lowest of any major US city other than Detroit.  This downgrade will mean that Chicago will have to pay higher interest rates for any money that it needs to borrow in the future thus putting further strain on the city’s budget.

This credit rating downgrade is just another in the long list of problems and headaches for the state of Illinois.  While most states would look for a way to cut their growing pension liabilities and shore up their struggling state, Illinois seems doomed to be controlled by strong armed Unions and a bloated liberal government that keeps digging a deeper hole.

Although Moody’s suggested increasing “tax revenue” in order to help Chicago’s pension liability, Illinois is already struggling under a heavy tax burden and major companies have threatened to leave the state because of the ever increasing taxes.

Chicago and the state of Illinois are fast heading down the same path that destroyed Detroit.  Soon Chicago will be nothing more than a documentary about how liberal policies destroyed another great American city.

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