Monday, July 23, 2018


"Put simply, America is on the verge of experiencing an 

absolutely catastrophic period of economic change, and it’s due 

mostly to its skyrocketing debt, which is the result of decades of

reckless government spending—by both political parties."

"If the economy were to crash, the only way for America to 

continue making those payments without raising taxes or 

cutting spending, both of which would be very difficult to do in 

a deep recession, would be to seek additional loans from foreign

governments or to print money."

America Is Headed For Fiscal Catastrophe – And No One Seems To Care

The opinions expressed by columnists are their own and do not represent the views of

The global debt level is reaching shocking new heights. The Institute of International Finance recently estimated the current total world debt is roughly $247 trillion—a truly unprecedented figure.
But as frightening as the global debt has become because of the dangers it poses to the world’s economic stability, Americans should be far more terrified of what this problem might mean for them, especially if the globe endures another major financial collapse before the United States can get its fiscal house back in order. Put simply, America is on the verge of experiencing an absolutely catastrophic period of economic change, and it’s due mostly to its skyrocketing debt, which is the result of decades of reckless government spending—by both political parties.
Although understanding how international financial markets work can be tricky, there are two basic reasons Americans should be deeply concerned. The first is that U.S. debt payments will likely over the next decade consume an increasingly larger share of the federal budget. In fiscal year 2018, which ends September 30, 2018, America will pay about $310 billion to service its national debt. The Balance reports these payments are the fourth largest budget expenditure in the current federal budget. Excluding Social Security payments, only “military spending ($874.4 billion), Medicare ($582 billion), and Medicaid ($400 billion)” are more costly.
Over the past decade, the size of these payments has not increased substantially, in large part because interest rates remained at historic lows as the world tried to pull itself out of the 2008 financial crisis. However, now the U.S. economy and many other leading economies are improving dramatically, interest rates will inevitably have to rise to ensure inflation doesn’t get out of control. AEI’s James Capretta estimates, “If the average real interest rate … gradually rose to around 2.2 percent over the next decade, then federal interest payments could reach $1.2 trillion in 2027 — or more than $0.3 trillion above CBO’s current forecast.”
This massive figure would consume so much of the federal budget that the government would be forced to raise taxes just to continue paying for existing government spending, stifling economic growth. This would be particularly problematic should the United States enter another deep recession, because during recessions, tax revenues often fall because of lower economic production.
Even more troubling, however, is the effect these debt problems could have on our currency. On its current trajectory, the United States will by 2027 likely be paying $500 billion to $1.2 trillion every year to cover federal debt interest payments. If the economy were to crash, the only way for America to continue making those payments without raising taxes or cutting spending, both of which would be very difficult to do in a deep recession, would be to seek additional loans from foreign governments or to print money. The former would only work, if at all, temporarily, and would eventually exacerbate the problem as interest payments grow ever higher. The latter is the most likely scenario, but printing money would create inflation, devaluing existing cash. The reason this would be so dangerous if the United States already has massive amounts of debt is that it could significantly undermine the world’s faith in the U.S. dollar, which is used every single day for international business transactions.
There is no global currency, so when two countries or, more commonly, two parties from different countries buy and sell, they often do so using dollars. There are some exceptions, of course. In the European Union, for instance, people buy and sell using euros, but for most of the world’s business transactions, dollars remain the currency of choice. The same is true for many of nations’ centralized banks. The reason this has occurred is that, following World War II, America has been the world’s most reliable and stable economy, making the dollar in the minds of many the safest currency among the more than 180 currencies available in the global marketplace.
That perception has slowly been changing, however. Over the past decade, top officials in countries like China have openly questioned the stability of the dollar and even wondered why some other country’s currency couldn’t replace it as the global standard. Some folks at the United Nations would love nothing more than to replace the U.S. dollar with a U.N.-sanctioned global currency, and some Europeans would surely push the euro as a better alternative.
If the dollar were to be replaced as the world’s currency of choice, it would cause economic turmoil in the United States. Not only would our markets and stock exchanges collapse as investors’ pessimism about America soars, hundreds of billions of dollars in cash would likely come rushing back to the United States, where foreign investors would buy up whatever stable assets they could, most likely real estate. More dollars in our markets would cause additional inflation, making our money even less valuable. This would likely force the Federal Reserve to raise interest rates to keep inflation in check, thereby making it even harder for businesses to get loans (because they would be more expensive with higher interest rates), causing the economy to continue spiraling downward.
Eventually, the United States’ economy would recover, although it might never regain its status as the world’s most important economy. But in the meantime, Americans would likely endure a Great Depression-sized recession.
All of these problems are avoidable. If America were to steadily reduce its debt, the world would likely stick with the U.S. dollar for the foreseeable future; if it ain’t broke, don’t “fix” it, as they say. The only way for this to occur, however, is for politicians in Washington, DC to get their act together and move away from our currently unsustainable policies. That doesn’t appear to be happening on either side of the aisle, and the results could eventually be far-reaching and monumental.
Justin Haskins (Jhaskins@heartland.orgis executive editor and a research fellow at The Heartland Institute.

Corporate tax collection rate at historic low

By Gabriel Black 

26 July 2018

The rate of tax collection from US corporations has dropped to a near-record low, according to a report by The New York Times.
Trump’s tax cuts, passed in December of last year, have caused a dramatic drop in the money being collected from major corporations, leaving their rich shareholders wealthier and the federal government deeper in debt. According to the White House’s Office of Management and Budget, the reduced corporate taxes will produce an additional $1 trillion in federal debt over the next decade.
Between just January and June of 2018, money gained from corporate taxes had dropped almost $50 billion from the year prior, a drop of one third. This huge sum, now in the pockets of the big companies, is not far behind the federal education budget of $68 billion a year.
The historic low in tax collections from US corporations, however, is not simply a national phenomenon caused by Trump. A new study by Ludvig Wier, an economist at the University of Copenhagen, has found that between 1985 and 2018 the average corporate tax rate has fallen from 49 percent to 24 percent. Speaking to the Washington Post, Wier remarked that “Corporate taxes are going to die in 10 to 20 years at this rate.”
Wier notes that in the face of offshore tax havens there is intense pressure on nations to lower their corporate tax rates. His paper estimates that in 2015 more than $600 billion of profits from corporate firms were transferred to several key tax havens. Wier’s paper, which was written with Gabriel Zucman, the University of California, and Thomas Tørsløv, the University of Copenhagen, states, “The massive tax avoidance—and the failure to curb it—are in effect leading more and more countries to give up on taxing multinational companies.”
The Trump White House and congressional Republicans falsely presented the $1.5 trillion tax cut as a means of helping the American worker. The reality is that the money corporations have gained from the cut have gone to share buybacks and dividends. These financial maneuvers are parasitic mechanisms that enrich the shareholders of corporations while taking money out of production and investment into the economy. This bonanza to the financial elite is expected to exceed $1 trillion this year, the highest ever.
Trump’s tax cuts have also contributed significantly to the federal deficit. As early as next year, the US annual budget deficit is expected to exceed $1 trillion. In every job, workplace and government throughout the world, budget deficits are used to justify cuts to essential social services and programs.
Even the International Monetary Fund, the global US-led banking organization that enforces austerity measures, has warned about this development. The IMF said that the Trump tax law will actually “encourage location of tangible investments abroad.” They note that the Trump tax code creates a new deduction very wealthy people can take by categorizing their personal income as pass-through income.
According to the Center on Budget and Policy Priorities, 70 percent of Trump’s tax cuts will flow to the top fifth of the population. The top one percent will reap 34 percent of its benefits. Millionaires in the United States will reap $17 billion from the tax cut just in 2018.
The Democrats did little or nothing to oppose the tax cuts, which benefit their own fat-cat base, and they have no genuine plans to reverse the cuts. When asked this week by a CNBC reporter repeatedly about what rate she would roll back the corporate tax rate to, Elizabeth Warren, D-Mass., refused to give a number. Her insistence that it was up to “negotiation” is a signal that the Democrats will take Trump’s tax cut as a new normal.
One cause of the tax cuts is the increased risk of financial instability. The White House estimates that in the fiscal year beginning in October, the US deficit will be $1.1 trillion, which is 5.1 percent of US GDP. Since World War II, the US almost never had a debt-to-GDP ratio higher than 5 percent, except in 1983, following a recession, and from 2009-2012, immediately following the financial crisis.

Report: 84% of People Underestimate How Much They Pay for Streaming Entertainment

The EU is looking at whether Google gives unfair prominence to its own apps such as maps or music streaming in deals with mobile manufacturers such as Samsung or Huawei
Getty/AFP/File Justin Sullivan

84 percent of people surveyed underestimated how much they pay for streaming subscription services such as Amazon Prime, Spotify, and Netflix.

According to CNBC, 84 percent “underestimated what they shell out on those monthly expenses, also including dating apps, cable television, and Wi-Fi.”
“On average, consumers spend more than twice as much as they think they do: They estimated they cough up $111 a month on such services when they actually average $237,” CNBC reported. “And regardless of the price tag, consumers were ‘happily hooked’ on many of their subscriptions, particularly Amazon Prime (which recently raised the price to $119 a year), cable TV and music streaming services, such as Spotify.”
Despite this, 23 percent of Americans claimed to have no money in their emergency savings, while 22 percent had fewer than 3 months worth.
Amazon increased the cost of their Prime membership in April following a “huge quarterly profit,” while this month, Netflix shares crashed after the platform received fewer new subscribers than expected.
Charlie Nash is a reporter for Breitbart Tech. You can follow him on Twitter @MrNashington, or like his page at Facebook.

Losing America

Not too long ago we as a people could generally agree upon a certain set of core values. Today a smaller majority of the American people still believe in the US Constitution and many people are starting to lose focus on the things that really matter the most.
When did certain members of our society all of sudden become selective regarding the laws they wished to be enforced ?
When exactly did some US citizens lose their basic instinct for survival ?
Sadly, we now have a substantial  force within the Democratic Party who currently advocate and even believe in wide open borders and illegal immigration. When did the acceptance of such a lawlessness become a norm ? When did the people who actually make it a point to stand up for the rule of law and who believe in securing our borders suddenly become the enemy ? Can a sovereign nation without a secure border, without a common language, and soon without a common culture survive?
The Democratic Party's leadership not too long ago believed illegal immigration was wrong (video). Why have their minds now suddenly shifted ? Has importing a new Democrat voter base into this nation become just too appealing an idea for them not to take advantage of?  A voter base which would be beholden to big government from cradle to grave. A voting bloc of people that would cast their votes depending upon what government could provide them.
Most rational citizens understand that unfettered and unchecked illegal immigration is a recipe for disaster. Yet huge factions of the new radical leftist Democrats currently believe illegal immigration is some kind of noble cause involving social justice. Many within the current party leadership have become all too willing to completely toss away the former US immigration melting pot model and happily replace it with a new "salad bowl" model.
Reality and history have proven to all of us that a nation simply we cannot safely absorb relentless waves of unassimilated immigration and expect to survive.  Illegal immigrants bring with them so many different languages and cultures, and many of them have no desire to assimilate or learn the English language. Diversity is not always necessarily a strength. Change is not always a positive thing. Illegal immigrants who refuse to assimilate and learn our language are placing a heavy burden upon us.
Illegal aliens who are willing to work for extremely low wages are helping to eliminate the US blue collar middle class. These illegal aliens currently flooding the US labor force are driving down the wages of American workers. I am sick of hearing the line, "Americans are not willing to do those jobs." In reality Americans would be willing to do those jobs, but obviously not for slave wages.
Illegal immigration is placing an enormous financial burden upon our health care system. It has become common place for illegal aliens to use the emergency rooms of US hospitals as their personal doctors. This inevitably drives up the cost of healthcare for all of us.
A decade-and-a-half ago, a former liberal Democrat named Dick Lamm gave a prophetic five minute speech on how a nation like America could easily self-destruct. The former governor of Colorado was issuing a warning to all of us in the United States who were willing to listen.  Lamm unveiled a chilling point by point hypothetical plan on how to destroy America through the immigration process. Every citizen within this country should consider listening to this five minute audio clip and hear the chilling  prophetic words of Lamm ring out so loud and true today. 
A nation that makes allowances for illegal immigration, especially without any significant time for assimilation, eventually becomes a nation under invasion, something which then eventually results in colonization.
The rule of law becomes a moot point when corrupt agenda-driven politicians within the government get to pick and choose the laws they wish to be enforced. When this type of selective law enforcement is facilitated, our country becomes nothing more than a banana republic.
The many remaining law-abiding citizens, along with Republican politicians, need to start adamantly calling out the Democrats for their irrational supportive stance regarding illegal immigration. We all need to confront the radical Democrats head on. They are the party whose senior members have the audacity to lecture and virtue signal conservatives on how evil and uncaring we have all become. Constantly painting those of us on the right as the bad guys. Simply because we conservatives dare to hold our American sovereignty sacred and know our borders need to become more safe and secure. All the rational people within this country are demanding the immigration process be a legal and closely monitored one.
Immigration could be a winning issue for Republicans in November. But they need to hammer this issue home with courage and fortitude, not backing down for fear of being called a racist or xenophobe. If the Republicans expect to win in November, they need to highlight all the negatives of uninterrupted waves of illegal immigration. A non-stop flow of illegal immigration being shoved down our throats by the Democrats and their puppet media.
We conservatives all need to stand as one with President Trump and affirm his policies regarding immigration. Trump's immigration plan adheres to basic common sense. Trump is putting individual American citizen's lives above political correctness, and this is making us all safer.
Illegal immigration has become the catalyst for big changes in this country. Changes within a nation which inevitably become irreversible if we fail to act. Change for the sake of change is a most dangerous thing.
An America that ignores the problems that come attached to open borders and illegal immigration is doomed for destruction. A citizenry which no longer believes in the rule of law and which pays lip service to our US Constitution is no longer free. A people who are no longer willing to hold their leaders accountable in regard to enforcing the rule of law, eventually become enslaved within a tyranny.
Photo credit: Markistos via Wikimedia Commons

Why Do We Need More People In This Country, Anyway? 
By Michael Anton 

The Washington Post, June 21, 2018 

No matter, because the Democrats are no longer the party of labor. Back when they were — in the prelapsarian Clinton years — they sought tight labor markets precisely for their efficacy in boosting lower-end wages. But today’s Democrats are the party of high class, high tech and high capital. 

This glamour coalition is not big enough by itself to win elections. So the left has hoodwinked some (but, as the 2016 election shows, by no means all) low-income voters into thinking that their interests align with those of Wall Street and Silicon Valley oligarchs. 


What ever happened to America?

Obama’s war on legals in Arizona.

The LA RAZA SUPREMACY Democrat party surrendered our borders, laws and jobs to Mexico to keep wages depressed and buy their votes!CHRISTIAN SCIENCE MONITOR

“Mexico prefers to export its poor, not uplift them.”

The following is a partial list of politicians that are La Raza members working for open borders, amnesty (illegal Mexicans are not interested in citizenship) and no wall. The ultimate goal of Mexico is to continue successfully using the United States as their welfare system, cut a deal whereby the illegals can hop the border, give birth, pillage, make their pesos and then return home.  DAVID


What will America stand for in 2050?

The US should think long and hard about the high number of Latino immigrants.

By Lawrence Harrison

It's not just a short-run issue of immigrants competing with citizens for jobs as unemployment approaches 10 percent or the number of uninsured straining the quality of healthcare. Heavy immigration from Latin America threatens our cohesiveness as a nation.
The political realities of the rapidly growing Latino population are such that Mr. Obama may be the last president who can avert the permanent, vast underclass implied by the current Census Bureau projection for 2050. 


"In the decade following the financial crisis of 2007-2008, the capitalist class has delivered powerful blows to the social position of the working class. As a result, the working class in the US, the world’s “richest country,” faces levels of economic hardship not seen since the 1930s."

"Inequality has reached unprecedented levels: the wealth of America’s three richest people now equals the net worth of the poorest half of the US population."


"Mexican president candidate Andrés Manuel López Obrador called for mass immigration to the United States, declaring it a "human right". We will defend all the (Mexican) invaders in the American," Obrador said, adding that immigrants "must leave their towns and find a life, job, welfare, and free medical in the United States."

"Fox’s Tucker Carlson noted Thursday that Obrador has previously proposed granting AMNESTY TO MEXICAN DRUG CARTELS. “America is now Mexico’s social safety net, and that’s a very good deal for the Mexican ruling class,” Carlson added."

"Many Americans forget is that our country is located against a socialist failed state that is promising to descend even further into chaos – not California, the other one. And the Mexicans, having reached the bottom of the hole they have dug for themselves, just chose to keep digging by electing a new leftist presidente who wants to surrender to the cartels and who thinks that Mexicans have some sort of “human right” to sneak into the U.S. and demographically reconquer it." KURT SCHLICHTER

Billionaire Mexicans tell their poor to JUMP U.S. OPEN BORDERS and LOOT THE STUPID GRINGO… and loot they do!
Billions of dollars are sucked out of America from Mexico’s looting!

1) Mexico ended legal immigration 100 years ago, except for Spanish blood.

2) Mexico is the 17th richest nation but pays the 220th lowest minimum wage to force their subjects to invade the USA. The expands territory for Mexicans, spreads the Spanish language, and culture and genotypes, while earning 17% of Mexico's gross GDP as Foreign Remittance Income.


Understanding LA RAZA / UNIDOSus: The U.S. tax dollar funded Mexican fascist party which is the fastest growing political party in America

Only in America could critics of a group called "The Race" be labeled racists. Such is the triumph of left-wing identity chauvinists, whose aggressive activists and supine abettors have succeeded in redefining all opposition as "hate."

Previous generations of immigrants did not believe they were racially superior to Americans. That is the view of La Raza Cosmica, by Jose Vasconcelos, Mexico’s former education minister and a presidential candidate. According to this book, republished in 1979 by the Department of Chicano Studies at Cal State LA, students of Scandinavian, Dutch and English background are dullards, blacks are ugly and inferior, and those “Mongols” with the slanted eyes lack enterprise. The superior new “cosmic” race of Spaniards and Indians is replacing them, and all Yankee “Anglos.” LLOYD BILLINGSLEY/ FRONTPAGE mag

 Breaking the Cycle of Poverty: PW Talks with Sarah Smarsh

By Stephen Camelio | 
Smarsh writes about growing up in a family of working-class farmers in Kansas during the 1980s and ’90s in Heartland (Scribner, Sept.).
Photo by Paul Andrews
Why write this book now?
I actually started in 2002 with a research grant to begin piecing together my family history. I was a college senior, the first from my family to go to college, and the campus environment had opened my eyes about my family’s disadvantages as rural laborers. Later, as a journalist, I gravitated toward covering economics, class, and rural issues. Over the years, the book coalesced as an integration of my family’s private stories with my professional understandings of public policies and realities. That’s another way of saying, I didn’t write it because of the 2016 election.
What role did being female play in your breaking the poverty cycle?
Social mobility is more difficult for women or any group that’s been historically marginalized. I tried to make clear the strides and sacrifices made by the women before me, reaching back several generations, that gave me more of a chance than they had. It’s a story about a family and society rather than some individual triumph.
What’s the biggest challenge of poverty?
Someone who works at a computer with time to mess around on Twitter might not understand that the constant, grueling labor many people do to survive can preclude you from political engagement or awareness. So one serious challenge is lack of civic agency required to change the system that harms you. If you have a dream, it’s hard keeping it alive when the vast majority of energy is required just to live.
You addressed this book to your inner child, or “unborn spirit.” Why?
It made me nauseous to think about someone reading it. I knew from publishing personal essays that this feeling means you’ve hit on something true. The direct address wasn’t contrived for the book, but rather reflects my experience growing up and actually having this private dialogue. When some pieces of the book weren’t quite clicking together, I added that very intimate and unique thing about my psyche. It let the reader in and transformed the narrative.
Has shame prevented a social movement by poor people?
More powerful than shame in one’s potential action is lack of understanding the extent to which you are getting screwed. There’s a reason why, in a world of historic economic inequality, people who have been exploited for their labor are intentionally kept outside of the social structure that makes decisions. The power that lies within them is incredibly dangerous to a small handful of people who profit off their labor.

A version of this article appeared in the 07/16/2018 issue of Publishers Weekly under the headline: Breaking the Cycle of Poverty

Experts warn humanity now consumes a year's worth of global resources in just 212 days

  • Earth Overshoot Day is point at which demand exceeds Earth's yearly resources

  • In recent decades, this has occurred sooner and sooner, and is now at August 1 

  • Experts say we're now using the equivalent of 1.7 Earths worth of resources
Humans are gobbling up Earth’s resources at record-breaking rates, worrying new estimates show.
The so-called Earth Overshoot Day, first conceived back in 2006, marks the point at which our demand surpasses the resources Earth is able to regenerate in a given year.
And, we’re now just a week away from that date for 2018.
Due to over-fishing, over-harvesting, and excessive emissions, researchers say we’re using up a year’s worth of resources in just 212 days – or, demanding the resource equivalent of 1.7 Earths.
The so-called Earth Overshoot Day , first conceived back in 2006, marks the point at which our demand surpasses the resources Earth is able to regenerate in a given year. And, we¿re now just a week away from that date for 2018. This year, it falls on August 1
The so-called Earth Overshoot Day , first conceived back in 2006, marks the point at which our demand surpasses the resources Earth is able to regenerate in a given year. And, we’re now just a week away from that date for 2018. This year, it falls on August 1
According to the team behind the effort to push back the Earth Overshoot Day, that point falls on August 1st this year.
A chart created by the Global Footprint Network shows how it has crept earlier and earlier over the last few decades.
Back in the 1970s, the overshoot point did not come until November-December.
Despite some periods where it plateaued for a little while, the global footprint has skyrocketed.
The Earth Overshoot Day is calculated using the latest UN statistics, assessing how Earth’s biocapacity (or the amount of resources it can regenerate in a year) measures up to humanity’s ecological footprint per year.
‘We are borrowing the Earth’s future resources to operate our economies in the present.
‘Like any Ponzi scheme, this works for some time. But as nations, companies, or households dig themselves deeper and deeper into debt, they eventually fall apart.’
According to the team behind the effort to push back the Earth Overshoot Day, that point falls on August 1st this year. The graphic above shows where the Overshoot day would fall if the whole world lived like individual countries do
According to the team behind the effort to push back the Earth Overshoot Day, that point falls on August 1st this year. The graphic above shows where the Overshoot day would fall if the whole world lived like individual countries do
While it may sound dire, the experts say it’s still possible to bring these numbers back down to a more manageable point.
The integration of energy-efficient buildings and better public transportation, for example, could help to slash the footprint of urban areas, according to the organization.
Reducing carbon emissions would have an especially significant impact.
‘Reducing the carbon component of humanity’s Ecological Footprint by 50% would get us from consuming the resources of 1.7 Earths down to 1.2 Earths,’ according to Global Footprint Network.
‘This corresponds to moving the date of Overshoot Day by 93 days, or about three months.’
Humans are now gobbling up Earth¿s resources at record-breaking rates, worrying new estimates show. File photo
Humans are now gobbling up Earth’s resources at record-breaking rates, worrying new estimates show. File photo


The Paris Agreement on Climate Change has four main goals with regards to reducing emissions:
1)  A long-term goal of keeping the increase in global average temperature to well below 2°C above pre-industrial levels
2) To aim to limit the increase to 1.5°C, since this would significantly reduce risks and the impacts of climate change
3) Goverments agreed on the need for global emissions to peak as soon as possible, recognising that this will take longer for developing countries
4) To undertake rapid reductions thereafter in accordance with the best available science

Food production also plays a major role in the 
global footprint, accounting for roughly 26 
By slashing meat consumption and reducing 
global food waste, the experts say we could 
push the Overshoot target back by several 
But, many of these goals may be difficult to meet if the population keeps growing as it is.
‘Given resource constraints,’ the researchers say, ‘countries with slowly shrinking populations may have a competitive advantage over countries with growing populations.’

The Blue-State Housing Bubble

Another housing bubble is beginning to burst.  Its financial characteristics are different from the 2007-8 housing bubble but it shares one thing in common -- that it is caused by government policies.
The 2007 bubble was caused by the Federal government insisting on home loan qualification standards changes.  Buyers who were not qualified to obtain traditional home loans were encouraged and even subsidized to get loans in states such as IL, CA, NJ, PA, and all other areas.  The details of these changes were documented by Pinto and Wallison.
The bubble burst because the easy money home loan qualification changes created two prongs of financial instability: 1) persons who were not qualified were allowed to obtain mortgages and 2) the easy money policies rapidly escalated home prices and placed many mortgage holders underwater when the artificially high housing prices crashed.
This bubble now being created in the biggest Blue states, while being driven by government policy, has a completely different financial dynamic.  This dynamic is best understood by looking at the financial condition of Illinois.
The financial insolvency of Illinois is directly linked to its public-sector pension system.  The unfunded public pension liability of the state is $251 billion.  But that one fact is only part of the story.  In addition to having this unfunded pension liability, the state now dedicates one-fourth of its annual state budget to pension costs. In order to finance the ongoing demands of the public pension system (Illinois has 650 pension plans throughout the state) the state seizes state grant money and state funds lawfully appropriated to pay for public services throughout the state and puts those into the pension fund located in the state capital, Springfield.  Since there are 4.8 million households in Illinois the average household owes $52,269 to the unfunded pension costs, and these go up every hour.  And in addition to that one-fourth of the Illinois state budget goes to pensions.
The amount of money the state has seized from public services can be seen by the fact that in 2016 the state owed vendors $15.9 billion and another $2.8 billionwas seized from funds allocated to pay for health care vendors.  This means the state literally seizes lawfully appropriated funds from state-mandated health care programs such as nursing homes and medication and places them in its pension fund.
Illinois has two state statutes that allow the state to seize both state grant money passed by the General Assembly allocated for state grants and another statute that allows the pension fund to seize state funds. 
In addition to these seized state funds, the Illinois Policy Institute, a watchdog group in Illinois, audited all 110-plus cities of Illinois and found that in the ten biggest cities, including Chicago, all the property taxes people pay go only to pay pensions, not to fund public services such as water and sewer, police and fire protection, and other essential services.
The core issue then is whether the demand for property-tax revenue made by the public pension plans will have an effect on housing values, and if this effect will be strong enough to create a housing bubble.
The best illustration of the current housing bubble can be seen with a specific example.  I know a person on the northwest side of Chicago, a middle-class neighborhood, who recently received, in his July 2018 property tax bill, a raise of $10,000 on his annual tax payment.  This was not a raise in the assessed value of his house, this was a raise in the tax that is due.  The house is 2,200 square feet and since the owner now wants to sell the house, it was recently assessed as having a fair market value of $348,000.  Before this $10K property tax increase, the property tax bill of the house was already at $13,800.  So if anyone wants to buy a house worth $348,000 they have to pay $1,983 per month in property taxes.  The mortgage will be about $1,350. per month, so the total payment will be $3,333 a month for a house worth $348K.  And each year the property tax will only go up.
What this means is that anyone who buys this house will already be paying a 7% property tax rate on the market value of the house.  That monthly property tax bill normally is for a house worth $1.2 million dollars at a 2% property tax rate.  No matter how one looks at this, it is foolish for a person to pay a property tax bill for a $348K house when at a 2% tax rate they could have a house worth $1.2 million.  While this is a quick back-of-the-envelope financial analysis, the trend is clear: Illinois has the highest tax burden of any state.
The Chicago Federal Reserve bank should be doing a precise analysis of this impending housing crisis, but instead recently suggested a 43% property tax hike. 
This is the bubble: homeowners are losing most, if not all, of the equity they have in their homes.  And once again it is being done by government.  This time it is not the federal government that is changing home mortgage loan lending standards but the Illinois state pension fund that is literally seizing home equity value to pay their pension demands.  And while this is happening, Illinois wastes over one billion dollars on interest needed to service what they've borrowed.
To understand how great the demand for tax revenue is in Illinois consider the fact that the largest pensions go to retirees from SURS the State University Retirement System.  The actual facts from Taxpayers United show that of the 200 top pensions going to university retirees, the lowest is $199,000 per year and the highest is $581,000 a year. This is not a projection, this is the information from 2017. To finance these pensions, young people who take out student loans are also seeing a drop in their long-term incomes. The Illinois Policy Institute reported that in Illinois public universities, half of the tuition goes to pensions.  So when students graduate from an Illinois public university, half their monthly student loan payment will go to extravagant pensions, and the voters of Illinois have no say in these pensions. 
This means these graduates have less money to purchase a home.  As a result, the young people in Illinois are the largest age group that is fleeing the state. They see the writing on the wall and cannot imagine they could ever afford a home and family in Illinois. More than 80% of Illinois counties saw population losses in 2017.
The bubble is bursting right now in Illinois and in CA, PA, MA, CT, NJ, NY, and all other big Blue states. California alone has a half-trillion-dollar unfunded pension liability. The financial mechanics are the same and cannot be stopped.
Image courtesy of Pixabay.

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