Is bankruptcy such an awful idea for Chicago?

Bankruptcy is a necessary part of the solution for so many aspects of government, especially the corrupt government employee (including teachers, etc.) pension systems. Here is John Pletz writing at Crain’s Chicago Business:

Few words get the attention of politicians, bankers, investors and employees like bankruptcy does.

Once unthinkable, the idea of Chicago filing for bankruptcy is becoming less far-fetched as the city stares down the barrel of $25 billion in pension obligations that it can’t meet. The topic sparked one of the more animated debates at Crain’s Future of Chicago conference last week.

Bankruptcy, or the threat of it, may be the only way to bring politicians, unions and investors to the table to do what needs to be done to right the ship for the next generation, three panelists argued as part of a discussion on budget issues at the city and state level.

“Bankruptcy was the opportunity to bring together a number of parties . . . both on the financial and on the labor side,” said Kevyn Orr, who was the emergency manager for Detroit when it filed three years ago. ”They said, ‘Look, we know the jig is up. We know we have to do this. You have to help me manage my own constituencies and cut a deal. I have to go out and villainize you, but I know this is what you’re capable of.’

“I’m hopeful that kind of discussion can occur outside a bankruptcy environment,” he continued. “But my experience has been (that) bankruptcy accelerates that discussion because it becomes real real, real quick. You have a federal judge that’s supervising the process, and parties have to drop some of the Kabuki theater and get to where the rubber meets the road.”

Read more: Crain’s

Image credit: Mike Madigan driving the car — an Illinois Policy Institute cartoon.