Moody's has dropped Chicago bonds to junk status.
Basically, the city has unfunded pension trouble. Past politicians put off funding the generous pension plans they offered to employees. Moody's does have a solution:
'Balanced against the city’s many credit challenges are several attributes, the greatest of which is the city’s broad legal authority to tap into its large and diverse tax base for increased revenue,” Moody’s wrote.'
Of course, the trouble with raising taxes, is that you can kill off growth, lose population, and go the way of Detroit.
I hope we muddle through.
How? I haven't a clue.