Illinois Needs a Moon Shot

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by Scott PIckard

For all of us that have a commitment to living out our years in Illinois, it’s a very scary proposition. I’ve got a State pension and who knows what could happen 5, 10, 20 years down the road. I guess I’m going to find out.

Illinois is in a slow bankruptcy burn. I’ve been inside companies that went bankrupt and Illinois has all the signs:

  • overwhelmed by crushing debt that grows daily
  • harassed by creditors from every angle that is slowly grinding the State down
  • a delusional hope springs eternal denial of the problem
  • citizen’s clueless to the real magnitude of the problem; or,
  • they simply don’t give a shit because there is nothing they can do about it and when it all blows up, they will just move on down the road
  • the problem is unfixable
  • the State is checked
  • the State is….. checkmate

The State will eventually hit the wall and either goes through a “simulated” bankruptcy; or, everything and everybody blows away like dust in the wind.

Chris Kennedy and other wealthy businessmen-politicians mean well but will only give us what the classic quote tells us and we all know deep down: “If you keep doing what you have always done, you will keep getting what you have always gotten.” But, I do admire that Kennedy et al want a crack at the State’s Fiscal Gordian Knot and are chomping at the bit to kick out Governor Bruce Rauner on his billion-dollar country club ass.

The politicians will NEVER solve the State’s Fiscal Gordian Knot in our lifetimes. Only the people can solve this by:

  • firing every sitting politician all the way up to the governor
  • hiring a third party turnaround trustee-manager person that does not live in Illinois and is clean of any conflicts of interest
  • have the person report directly to the people
  • have the person manage a “moonshot” competition to develop a 50-year plan to reach financial sustainability
  • any person and/or team on the planet can submit their moonshot plan
  • have the people use “approval voting” to vote for the best moonshot plan
  • the winning moonshot team gets $100M paid out over 50 years contingent on performance of the plan over time
  • while the plan is playing out, re-engineer and revolutionize Illinois government so this never happens again

All you radical-thinking, clear-thinking people out there, here’s your chance to make your mark, never have to work again (unless you want to), save Illinois, and in the process design a revolutionary financial roadmap for the rest of the world because we’re all going to need it.

Crazy, you say?

Have you got a better idea?

- sp -

How bad a shape is Illinois in?

The looming bankruptcy red flags continue to mount for Illinois as individuals and companies exit the state in search of good jobs, lower taxes, and to escape the entrenched cronyism, corruption and dysfunctionality of its politicians and unions.

Financial Management Cash Management What anti-check fraud procedures are in place?  Do we have systems in place to detect money laundering?  Are all bank accounts reconciled each month? What minimum cash balance is appropriate for the company?  Is the company using every available technique to minimize transfer time for collecting cash balances? (a) rapid billing; (b) lock boxes; (c) discount policy; (d) collection efforts  Who is authorized to make payments of company funds and what amounts are they authorized to disburse?  Are authorized persons bonded at the appropriate amounts?  What is the company's plan for optimizing the balance between maintaining the liquidity of excess cash vs. generating maximum short-term and long-term interest income? What proactive measures are taken within the company to prevent embezzlement? cash flow: What are the long-term cash needs for the company for the purchase of property and equipment?  What effect does the variation in key assumptions (sensitivity analysis) have on the financial projections? | cash flow statement: direct vs indirect | check fraud: anti-check fraud procedures | Forecasting Cash Flow sp | money laundering: detect money laundering bankruptcy: Has the company ever filed, or considered filing, for bankruptcy?  Are any of the company’s vendors in bankruptcy or near bankruptcy? | American Bankruptcy Institute: www.abiworld.org | appraisal of asset values: www.accuval.net | banks: bank run |checklist: IRS | IR Internet Bankruptcy Library: http://bankrupt.com | liquidation services: www.liquitec.net investment policies: What is the minimum acceptable investment return on capital items?  How are lease vs. purchase decisions evaluated?  What is the company's investment policy with respect to excess cash?  How much is kept in short-term marketable securities?  What is the record of gains (losses) from sales of securities in the company's portfolio?  Does the company perform background checks on either the firms or individuals that handle the company's trading in securities? Checklists | Cities | Identity Management | Personal Finances

 

DAVOS: World Economic Forum

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Debt in retirement

We’ve chosen to keep our mortgage in retirement.  We refinanced to take advantage of the historically low rates and that  has dropped our monthly payment amount which is good during retirement mode.  And we get to keep the deduction for mortgage interest which helps at tax time.  If something comes up where we will need some cash (emergency; health issues; remodeling), we can easily open a Home Equity Line of Credit (HELOC) and also get a deduction for the interest on that loan.  With bank, CD, and mutual fund rates so low, for our house in our neighborhood in our town, it is the most reliable performing asset we have, having consistently appreciated over the long term (30 years).