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Detroit Files For Bankruptcy (Retirees Outnumber Employees By Over 2 to 1), Judge Bars Pension Cuts
Confounded Interest ^ | 07/18/2013 | Anthony B. Sanders

Posted on 07/18/2013 3:00:40 PM PDT by whitedog57

The City of Detroit filed for bankruptcy Thursday in federal court, trying to get out from under billions in debt. If approved it would be the largest city bankruptcy in U.S. history.

The filing was under what is called Chapter 9 of the U.S. code, which allows municipalities to restructure debt under bankruptcy protection. The bankruptcy filing begins a 30-to-90 day period during which the court will determine whether the city is eligible for Chapter 9 and how many creditors will want a piece of the city’s limited resources. A city must be insolvent to seek Chapter 9 protection.

Detroit is near the statutory limits of its ability to tax. That power has been dragged down by a drop in the city’s population, down 60 per cent from almost 2 million at the peak in the 1950s to just under 700,000. The led to a 40 per cent drop in tax revenues since 2000. The city has had to borrow money to meet its operating budget which has been slashed. With the City retiree pool currently outnumbering active employees by an over-2 to 1 margin and growing, the City must address pension and retiree!healthcare liabilities as part of any comprehensive restructuring. As discussed above in Section 3(b), the City and its advisors are currently evaluating ways to reduce these unfunded liabilities, which involves an evaluation of plan design and benefits offered, to identify potential cost savings.


Faced with the obvious solution of slashing pensions, a Michigan judge (Ingham County Circuit Court Judge Rosemarie E. Aquilina) temporarily barred the state’s governor and Detroit’s emergency manager from taking any action that would allow cuts in pension benefits for city retirees.

The Obama Administration quickly responded: “We remain committed to continuing our strong partnership with Detroit as it works to recover and revitalize and maintain its status as one of America’s great cities,” White House spokeswoman Amy Brundage says in e-mailed statement.

Do I smell a Federal bailout … again?

TOPICS: Business/Economy; Government; Politics
KEYWORDS: bankruptcy; chapter9; detroit; michigan; obama
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To: Osage Orange
Would have been better than O. At least Romney actually had/has jobs that generated money.
Sorry you do not under stand the difference between capitalism and being ruled by a socialist.
Oh, and Dole was not in this race at all and you well know who and what I was specifically referring to... if you don't it is probably better you did not vote so Obama won, just as you subconsciously wanted.
A quick question or two; Did you feel that Chrissy tingle up your leg when you thought of or heard O?
Did you faint when you were at his rally?

41 posted on 07/18/2013 6:04:56 PM PDT by JSteff (It was ALL about SCOTUS... We are DOOMED for several generations. . Who cares? The Dems care!)
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To: jdsteel
Yes and night sweats and terrors...
42 posted on 07/18/2013 6:06:13 PM PDT by JSteff (It was ALL about SCOTUS... We are DOOMED for several generations. . Who cares? The Dems care!)
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To: whitedog57

Detroit has no tax base and no income to pay its pensioners. The State of Michigan won’t bail out Detroit and it’s unlikely that Feds can either. In other words, it’s time for Detroit to go into liquidation.

43 posted on 07/18/2013 6:17:53 PM PDT by MasterGunner01
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To: MasterGunner01

o pension cuts?

let the judge pay it

44 posted on 07/18/2013 6:20:13 PM PDT by GeronL
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To: JSteff
You've been here since '98...and you know very little. And project much........

You will have the last word.

45 posted on 07/18/2013 6:37:54 PM PDT by Osage Orange (Light travels faster than sound. This is why some people appear bright until you hear them speak.)
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To: TurboZamboni
Pension gap divides public and private workers (2007 article but timely)

What about the division between workers, both public and private, and the Wall Street high rollers who gambled away 401ks and crashed the economy for all in 2008?

You’ll see what regular Joes are angry about.

Regular Joes are upset about ordinary people facing financial hardship or ruin, whether they're public or private employees, business owners, blue collar or white collar, young or old, black or white. What's the point of trying to pit people against each other in a zero sum game? Adjustments and "haircuts" may need to be made, but they need to be in a spirit of necessity, not a spirit of malice.

46 posted on 07/18/2013 8:05:26 PM PDT by Route797
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To: whitedog57

Let the people of Detroit eat hope and change. They’ve let their city become a cesspool.

Obama gives out Obamaphones to whoever will take them. Next will be prayer rug distribution to whoever will take them - or be made to take them.

47 posted on 07/18/2013 8:55:16 PM PDT by Words Make the Man
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To: whitedog57

Cities have functioned as a gigantic payoff machine for rat voters. If they are allowed to sink under the waves as they deserve, the rat will have to swim. The Rat party will lose its utility to its little rat voters. Can’t see it being allowed to happen. We’ll see. The Feds have already become more and more the nursing mother. Maybe that maintains the status quo until the nation collapses.

48 posted on 07/18/2013 9:13:00 PM PDT by Stentor
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To: Route797

Who really unchained Wall Street?

For all the bluster of Obama, pre- and post-2008, as well as that of Attorney General Eric Holder concerning the alleged criminal activities on Wall Street, there have been zero Wall Street prosecutions under Obama/Holder. Compare that with his predecessors Bush and Clinton:

GAI [Government Accountability Institute] details how the George W. Bush and Bill Clinton administrations both actually took down financial criminals - unlike the Obama administration. Between 2002 and 2008, for instance, GAI points out how a Bush administration task force “obtained over 1,300 corporate fraud convictions, including those of over 130 corporate vice presidents and over 200 CEOs and corporate presidents.”

“Clinton’s DOJ prosecuted over 1,800 S&L (savings and loans) executives, senior officials, and directors, and over 1,000 of them were sent to jail,” GAI adds. But, despite having “promised more of the same,” especially in the wake of the 2008 financial crisis, the Obama administration’s DOJ has not brought criminal charges against a single major Wall Street executive. The Bush and Clinton administrations’ track records on prosecuting white-collar crime, and the Obama administration’s failure to do so, Schweizer said, is “evidence that this has less to do with some sort of partisan or philosophical issue.”

Bush - 1,300 convictions;

Clinton - 1,000 convictions;

Obama - Zero attempts.

No One Will Charged With a Crime for the MF Global Collapse—finance.html?_esi=1

49 posted on 07/19/2013 5:57:21 AM PDT by TurboZamboni (Marx smelled bad & lived with his parents most his life.)
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To: GeronL
My understanding this was a MI state judge. What power does she have over a federal bankruptcy court? None, unless pols give her that authority. They should tell this moron to pound sand and ignore the twit.
50 posted on 07/19/2013 6:29:40 AM PDT by MasterGunner01
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To: TurboZamboni
Obama and Holder, always looking out for the little guy!
51 posted on 07/19/2013 12:52:13 PM PDT by Route797
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