Cities such as New York and Chicago are in deep financial trouble. Broadly speaking, they have two options: Make the difficult but appropriate choice to raise taxes and reduce the scale of government, or continue to live in a state of denial, increasing their pension obligations while also promising their residents more services.

I am sad but not surprised to report that they are choosing the latter. Even though both cities — as well as New York and Illinois — face major budget shortfalls, high taxes and declining populations, they are doubling down on irresponsibility. Illinois has made Chicago’s pension benefits more generous, and New York is considering its own version of the Illinois bill. Either these governments have become completely detached from reality, or they are counting on a federal bailout.

© Bloomberg