Listen up Bernie fans. This show is for you.
Big government with big promises do not work, no matter how lovely those promises sound.
Chicago, the nation’s 3rd largest city, is the perfect example. Government workers are demanding their full pension, even as the city heads toward bankruptcy. Each household now owes more than $61,000 in future taxes to pay down more than $63 billion in bonds and pension shortfalls.
In a desperate attempt to pay down the debt last Fall, Chicago’s City Council passed Mayor Rahm Emanuel’s $7.8 billion budget, which included a 72% property tax increase!
More people will be forced to move out of the city and into the suburbs.
There’s another reason why people will be moving out into the suburbs - they don’t want to be the ones who pay off the government debt!
This is exactly what happened in Detroit. Taxpayers fled Detroit for decades as the city’s tax bill kept growing while vital government services were slashed - such as public safety and quality education.
With increased debt and fewer tax payers, Detroit filed for Chapter 9 in July 2013. This allowed the city to restructure its debt, officially snuffing out $7 billion of debt by cutting pensions and payments to creditors.
Bankruptcy may be the only solution for Chicago now as well.
But Detroit’s problem was much smaller. That city has about one-third the population of Chicago. And Detroit’s retirement funding gap was $3.5 billion, with each resident liable for $5,100. Chicago’s is five-times that.
With all this information, is Chicago still a good market for real estate investors?
For the full transcript: visit www.NewsForInvestors.com
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