The Illinois Lottery kinda sorta doesn't have your winnings but is totally good for it, man

Are you talking about the lottery thing or the pension problems?

If it is the pensions, yeah, changing demographics are a problem for pensions. But it really is a relatively small thing. Their state and local pension liabilities are something like $250 billion and counting -- and the rate of growth is accelerating. The main problem is that they made ridiculous commitments. Throughout the 70s and 80s, politicians gave ridiculous benefits to public unions in exchange for votes. This is what you get for that -- anyone who pointed this out along the way was disregarded. You had state employees retiring in their 50s and being paid a lot for the rest of their lives to do zilch. They actually have given annual pension boosts that can double the benefit over the course of retirement and in some cases you had people retiring in their 50s who got back their contributions to the pension fund after only 2 years in retirement. The whole thing has been a giant scam, and the whole state suffers for it. Supervisors would give automatic promotions a year or 2 years before someone was near the retirement age to boost their highest annual salary, and throw a lot of overtime at the person, so their pension benefit would be higher. Everyone was taking care of one another -- at the state's expense.

Then add to it that all pensions (not just these public pensions that are going to default on their obligations, but private pensions that have been managed much more responsibly, but are now facing their own crises) have gotten creamed by interest rates being strangled by our central bank. The risk free rate of return in an environment in which savers are being robbed to benefit a massive increase in debt levels has us in an environment in which the traditional way of trying to manage a pension fund (without taking reckless risks -- which some have started to anyhow by necessity) guarantees that you not only can't grow the money very much to meet your commitments, but in real terms, you have been losing money. So we're now at a point where interest rates are being kept ridiculously low via crazy manipulation, which has put us on the precipice of a pension crisis. If they allow interest rates to float in an actual market, all the debtors (including the state governments) won't be able to even service the debt mess that has been created, let alone keep living the fantasy we're still trying to cling to.

Obviously, given the backdrop of this particular pension mess, a lot of people won't have sympathy for people who retired in their 50s and are paid ridiculously for the rest of their lives. But even if we were talking about a pension that was actually funded reasonably (by the beneficiaries, at reasonable levels) and the shortfall was entirely because pensions have gotten fucked over by monetary policy, in the end the pensioners would be SOL anyhow. The levels of debt that create the backdrop for every discussion like this now are huge, and we have been reduced to trying to do anything to manage the fact that we're addicted to debt . They'd prefer to inflate away some of the debt load to steal from the borrowers who funded it, but if necessary, in the end they will just default and/or confiscate assets from people in the name of "saving the world from crisis."

Either way, the question in Illinois (and Connecticut, and a bunch of other places that are going to be in the same boat soon) isn't whether they will default on their obligations. The question is how they are going to try to spin it to try to make it sound like something else.