Skip to comments.Detroit Files For Bankruptcy (Retirees Outnumber Employees By Over 2 to 1), Judge Bars Pension Cuts
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 citys 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 citys 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 states governor and Detroits 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 Americas great cities, White House spokeswoman Amy Brundage says in e-mailed statement.
Do I smell a Federal bailout
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.
o pension cuts?
let the judge pay it
You will have the last word.
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?
Youll 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.
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.
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.
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
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