Why should you care about Chicago Public Schools if you don’t live in Chicago? First, because this is another economic sinkhole of corruption and debt, like some Canadian provinces and Puerto Rico, that are going to be the North American equivalent of Greece. Second, the CPS borrowing is “tax-exempt.” In other words, you are subsidizing this financial slavery.
Here’s a news story from a few months ago:
CPS backed off from their whopping billion-dollar borrowing spree and instead merely (!) $725 million. CPS borrowed this money at an 8.25 percent interest rate and will (theoretically) be paying on this one loan until 2044.
All of this outrage, and more, is documented by Kristi Culpepper at Medium. She writes:
The sole purpose of this bond issue was to provide CPS with a few months of budget relief, not unlike the general obligation bonds Puerto Rico issued immediately before being cut off from the capital markets in 2014.
So Chicago taxpayers incurred a lot of new debt that they have nothing of tangible value to show for. It’s just a simple transfer of their wealth to the capital markets, on top of the quarter of a billion dollars they recently paid their interest rate swap counterparties. This has become a routine occurrence not only for CPS, but for the City of Chicago, which shares the same tax base.
Read her whole post if you can stomach it. The only question is when will the rest of the country be despoiled to bail out Chicago, Illinois, and other corrupt sinkholes.
Here’s another video that explains the junk bond status of the Chicago Public Schools and gives some more of the background.
The wages of debt are horrible and they are going to get worse.