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
“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. “
Ok, Judge Airhead. Do you have the money to pay for that stuff under that black skirt of yours?
How does a state judge think she has any say in how a federal bankruptcy action will be handled?
Detroit is broke because whites fled the city and took their tax money with them. And it all started with the radical “leadership” of corrupt democRAT Coleman Young.
Obama will bail out the Detroit pension recipients.
I certainly hope not. I’m getting a little tired of the statists and the employees of the statists’ instrument of power (the government) being protected and sheltered.
This "Tragedy of the Commons" crap spreading the pain of corruption and ineptitude can't go on.
Judges get pensions too.
They are going to be so surprised when they discover that you can't have government spend money and have it, too.
Conflicting reports: this article from 30 minutes says she was going to bar the emergency manager from filing for bankruptcy, but the petitioners were minutes too late.
Detroit can’t pay its bills, so a judge is going to require them to pay their bills before they can slash their budget?????
The greedy working class of America will have to do their part to support this wonderful city. There are a lot of beds that need feathering and a lot of back that need scratching. Unions need their money!
The whole point of bankruptcy is to get out of bad contracts. While I feel sorry for the retirees, their benefits are not sacrosanct and should not be preserved at the expense of taxpayers. A private company that goes bankrupt does just that. Municipal employees are not holier than thou.
Everyone must be responsible for his or herself. You cannot and should not depend upon the government or others to take care of you.
When will the federal government follow suit? The sooner the better. It’s time we all take our medicine, pick up the pieces, and build anew.
I’d suggest that it goes back well before 1967.
Detroit councilwoman to Obama: We voted for you, now bail us out
Give every retiree 40 acres and a mule.
The real political fight hasn’t begun, yet. Government employees will struggle in politics against their predecessors (pensioners) for the decreasing availability of debt/revenues, as the default process continues. That’s where the money is, although it will drastically decrease in value (recirculating debt without manufacturing production of real wealth).
Have fun. Enjoy the slide (unless you’re a government employee or pensioner). Gloat fast over having sent most of the real work for real men to foreign countries over the past few decades, because the situation won’t last long.
1) city government (Democrat-run, natch) overpromises on pensions and steals the taxpayers blind
2) said government declares bankruptcy
3) taxpayers across the country get stuck with the bill.
What we have here is another welfare program, which transfers the hard-earned money of working people, to the moochers in Detroit.
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