Friday, May 22, 2015

Chicago isn't Detroit: Detroit is Iraq

Posted By on Fri, May 22, 2015 at 9:57 AM

That's the takeaway from a recent report from Chicago's ABC7 following news that Moody’s Investors Service downgraded the Windy City's credit rating to "junk" — currently the worst credit of any major U.S. city.

According to Moody's, each Detroit taxpayer owed $13,000 in pension debt before bankruptcy. Presently, it's estimated that each Chicago taxpayer owes $26,000 — or twice as much.

So is Chicago the next Detroit? Is Chicago worse than Detroit? Not so, says Matt Fabian of Muncipal Markets Analytics in the ABC7 report. "Chicago is the third largest city in America," he says. "Detroit is Iraq. Detroit is a disaster zone. They have no economy."

Chicago Mayor Rahm Emanuel echoed the sentiment. "The city of Chicago is the most diversified economy in the country," he says. "No one sector drives more than 13 percent of employment."

OK, sure — there are some important differences between Chicago's and Detroit's situations. But what about Iraq's and Detroit's?

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