Fiscal Disaster: A major credit rating agency has just given Chicago, with more general obligation debt per capita than Detroit, its second triple-notch downgrade in six months. Its bonds are perilously close to junk status.

Citing skyrocketing pension costs and a lack of meaningful solutions, Fitch Ratings lowered Chicago's debt to A- from AA- last week, making it the second serious downgrade since July.

The move by Fitch follows a triple downgrade of Chicago's bond rating by Moody's Investors in mid-July.

Moody's cited the city's "very large and growing" pension liabilities and "significant" debt service payments, among other factors.

The steady financial decline of the nation's third-largest city prompted us in early August to say Chicago was well on its way to becoming the next Detroit, a bankrupt monument to the perils of Democratic governance, a one-party Democratic town in arguably the bluest of blue states. And Chicago's mayor, former White House Chief of Staff Rahm Emanuel, learned financial discipline at the feet of the master — President Obama.

Like the president, Emanuel could claim he inherited the city's financial mess from his predecessor, but that would require blaming another Democratic mayor, Richard J. Daley.

Interestingly, Democratic governance is a common thread running through America's urban problems.

As the Chicago Tribune noted in its recent report on the problem, "Broken Bonds," Chicago's outstanding debt on general obligation bonds has quadrupled during the past 18 years, reaching $7.2 billion last year.

With interest, that amount nearly doubles. The city has more general obligation debt per capita than any of the 10 largest U.S. cities except New York.

The Tribune noted that Chicago leaders have routinely used bond proceeds to make interest payments on the bonds themselves, borrowing more than $450 million since 2000 just to pay interest. Some 63% of all property taxes went to debt payments last year.

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  • Is not Chi-town the town that Al Capone built..???.what else is new when crooks try and rip off other crooks...At least now it is not with machine-guns..Though that might come later...Yes, Mike, Tea Party has the high moral ground and all the right answers....But criminals do not want Truth...they want money any way they can steal it...

  • This sorta says it all doesn't it?

    Interestingly, Democratic governance is a common thread running through America's urban problems.

  • He's just an idiot............ And there's very little that is useful about Rahm Emanuel.

  • It's very sad and shows just how badly this nation has fallen over my life time.  Sure, their have always been people who broke the law, stolen from the citizens and taxpayers but it is astounding how much it is going on today.

    No morality, no responsibility and very little god-fearing people.  Power indeed corrupts.

  • Another Democrat-Ruled-City following in the long line of Financial and Moral Failures.  

    Rahm will probably blame it on G.W., who stopped by in for a one day visit in 2005 . . . and the Left's Useful Idiots will believe it.

  • I love happy stories like this.  Couldn't happen to a nicer bunch.  We, in the Tea Party will be proven 100% right as time goes on.  How sweet it is!!!!!!

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