In the 1890s Charles Dana, editor of the New York Sun, referred to Chicago as the “Windy City.” Chicago was one of many cities competing to host the World's Fair, and clearly the writer intended the double entendre to apply to the city's weather as well as its mouthy politicians.

When it comes to Chicago's weather, anyone who has visited “Chi-town” (as the city is known in CB-lingo) can attest to the screaming wind off of Lake Michigan. It howls for what seems like days at 40 mph, carrying with it sub-zero temperature in the winter.

As for Chicago's politicians, spouting hot air just happens to be a trait common to people in that profession.

But now it might be time to paint some more of them with that broad brush.

Chicago Schools Are Dead Broke

There you have it. The Chicago Public School system (CPS) is broke. Even after Mayor Rahm Emanuel took a knife to the CPS budget last summer, cutting away almost half a billion in spending, the system still faces a $500 million shortfall.

District officials have come up with the brilliant solution to fund their operations by issuing bonds, as if that will bring in more tax revenue or lower their expenses. Bond buyers would have the promise that CPS will use its “full faith and credit” to repay the bonds.

There's only one problem. It's a lie, and the district officials know it.

The term “full faith and credit” means that a borrower will use all assets available to repay a debt. But Chicago's school system, in the footsteps of Detroit two years ago and now Puerto Rico, has no intention of foregoing other expenses to pay bondholders.

Hook, Line, and Sinker

Their plan, just like Detroit and Puerto Rico, is to con whomever they can into giving the system cash. They have one goal: hold off bankruptcy just one more day, until there's not another sucker willing to take the bait.

In this case, the bait is pretty tempting. The Chicago Public School system is offering an 8.5% yield on a municipal bond, which equates to a 12.3% taxable yield at a 35% tax rate.