The analyst did the work before the recent downturn

One analyst has affirmed the state’s investment-grade rating after the meeting. On March 14, S&P Ratings affirmed its rating of BBB-, one tier above junk, on upcoming sales of bonds backed by Illinois’ full faith and credit. The state has a tentative plan to sell a $300 million bond in April to finance its pensions, and wants to issue a total $2 billion of pension bonds this year.

The growth rate of Illinois has likely dropped to flat, frankly, as California is about flat.   One way or the other, the debt will grow or the interest charges rise above plan. They cannot take on an additional 2 billion if the foreseeable is nearly flat growth, or even under 2% growth. The rates on that bond are close to 4%, or slightly higher I think.

The uncertainty is three paths

We suffer the annoying Q1 burp, Or we have the mild downturn, or monetary regime change. No one has the answer until the scary chart index starts tells us. One thing is certain, we cannot do the severe recession without a monetary regime change, so everyone should be planning on a meeting of the elders, just in case.

My plan generates possibly 12 trillion in ice the kids can melt over the next 30 years. The initial 8 plus the bonus 4 if all the agencies get themselves solidly on cash flow accounting. AOC and the Ice Melters can learn a little something about cold weather, and keep some ice around for 30 years.