Skip to comments.Judge Rules That Detroit Bankruptcy Filing Is Unconstitutional
Posted on 07/19/2013 2:23:28 PM PDT by SeekAndFind
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I am..........35 years at Connor and Charlevoix.
There is a provision in the Michigan State Constitution that says that public employees' pensions must be honored.
That's over-concentration. Any CFA worth his salt will tell you it's a bad idea.
You'd be in better shape if your employer's pension contributions had instead been paid to you, and you had used them to purchase a diversified portfolio of investments.
Current government employees vs. pensioners. It’s going to happen all over the country before long. There’s no other group with enough government funding to fight over. Teachers, regulators, police and others against those who retired. The retirees will lose first, because favored constituents want to keep services going.
“If my company were to file bankruptcy and try to terminate or reduce my guaranteed pension, that would financially destroy me.”
And what makes you think that you are so special? I too had my retirement set up ( no pensions for me, I had to provide for my own retirement by my own means) and I was starting to draw on my investments in retirement. Life was good, and it was easy to see that we would have enough to see us to the end of our lives. Then 2007 came along and we watched 30% of what we had invested evaporate!. And at the same time saw earnings on what was left drop precipitously. So buddy, as far as I am concerned, if you loose your retirement, it’s just tough $h!t! If it happens, be a big boy and figure out how you are going to survive, that’s what we have had to do.
How many other cities have filed for bankruptcy?
Bankruptcy is illegal and Unconstitutional.....unless it is a citizen.
in that case, bleed em dry.
The judge can find that in the Constitution but they cannot interpret “shall not be infringed”?
Ahhh, I got it now! You got screwed on your OWN personal investments, just as I DID, and now you have no problem with me or anyone else losing our company's CONTRACTUALLY GUARANTEED pension plan, the plan we worked 35 years for.
There's a big difference between our personal savings and investments, WHICH BOTH YOU AND I HAD, and one's company pension plan, which obviously YOU didn't have and and thus have no sympathy for someone who did.......
Evidently MISERY DOES like company bro, you're one sick dude...........
Do you feel the same way about Social Security? If the govt. can no longer make it's payments to us retirees, is your attitude still "screw you, suck it up"???????
Using an absurd interpretation of the Constitution to protect her own pension.
“I guess this judge expect the city to create money out of thin air.”
No, the judge expects the city should not commit to spending money it doesn’t and won’t have. Having unlimited taxing authority means prolific spending obligations cannot be dodged via bankruptcy.
The people voted these politicians into power, knowing what kind of spending commitments they would enact. The politicians committed to insane spending - no surprise. Having gotten what they voted for, don’t renege on contracts and don’t put the rest of us on the hook for making up for the disparity.
She done good. The people of Detroit elected the politicians to shit in their bed, and now the people of Detroit can lie in it - don’t make us clean it up.
Let the nation know what Democrat promises result in. Don’t let them shirk their responsibility.
These idiots are going to force us to take them seriously.
....$18B is chump change.
Detroit, Baltimore, Chicago, Buffalo...doesn't matter...
...monopoly money for all!
"Money itself isn't lost or made, it's simply transferred from one perception to another".
It sounded like a big, sloppy, juicy Obama butt-kiss to me.
This has happened to just about everyone in the airline industry, including me. The main reason my airline wanted to declare bankruptcy was so it could declare all union contracts null & void. After several attempts (the government kept stalling them), they finally were able to do it and then cut all the pensions. I’ll be lucky if I get 25¢ a month for my years there. I fully expect the PBGC (and Social Security) to be ancient history by the time I retire. But we Gen Xers have known this all our lives...that we’re paying into a Ponzi scheme and will never see a dime of it in return.
Oh yes...special save detroit tax comming soon
Well said, agree 100% !
.... Big difference in a 401k investment / savings and a Defined Benefit Pension Plan......
Are not all pensions guaranteed as in a defined benefit plan ?
Several, but none the size of Detroit.
Judge “little eagle” ???
This twit lacks the power to trump federal bankruptcy law, so her ruling should simply be ignored. However, just so she isn't left with the impression that her ruling was anywhere near correct, I'm sure the Michigan Court of Appeals with reverse her in a strongly worded opinion.
What obligation do the taxpayers have when elected officials ‘bargain’ w/ unions (whom then kick-back $$ into the election officials offers)? When/where are the taxpayer represented?
Because the City council said ‘You can have 90% raises every year” FORCE the Citizens of that city to the ‘contract’??
Who, in this world, can "guarantee" the future?
“What obligation do the taxpayers have when elected officials bargain w/ unions? When/where are the taxpayer represented?”
Every November they had the obligation to vote wisely. They elected their representatives.
But it is what it is, change them going foreward but don’t destroy the lives of those people who worked for what they are receiving..........
Sorry, but this is crap. My kids don’t owe you a damned thing. They never voted for these politicians and they are not even working yet. We caused this because we allowed our politicians and public unions to go crazy and now you and many others want to tell my children that they owe you.
Why? They had no skin in the game so why should you be allowed to have a credit card with their names on it? This is the problem with Social Security too. I don’t really care what you were promised. The world does not work that way and reality bites.
I get it - everyone works for their retirement, but somewhere along the line we got it all wrong and things got a bit crazy. That comes with consequences. Just admit the truth.... you want to enjoy your own comfort until you die because they LIED to you and promised it to you.
Please show me in the constitution where the next few generations should have to pay for your generation or mine? It’s not there. Young Americans and unborn Americans did not vote for these clowns - you and I did. We should reap the consequences, not them.
We are enslaving future generations and it’s immoral, unconstitutional, and frankly the exact opposite of conservatism. Debt can be accrued if the very survival of the nation is at stake because each citizen present and future has an interest in that. Debt should not be accrued to allow our current retirees to live off the fat of their children, grandchildren, and great-grandchildren. Debt should not be accrued to pay a bunch of lazy deadbeats because they doctor shopped a disability diagnosis or made poor life choices. Debt should not be accrued for pet projects, pork, and half the crap the government spends money on.
You are basically saying that the kid who took your job should get far less from his own labor so he can fund what they promised you. How is that moral?
“Do you feel the same way about Social Security? If the govt. can no longer make it’s payments to us retirees, is your attitude still “screw you, suck it up”???????”
Social Security was “set up” to be a mandatory “insurance plan.” In my situation at least, I have paid into it more than I’ve received from it. But even now, the new SSI checks say “GOVERNMENT BENEFIT” on them! Like Detroit, the Feds will ultimately default on SSI because the way that they have already spent most of the taxpayers contributions, along with “adding unfunded benefits” that have never been accounted for in the funding structure. So, while I will probably manage to get SSI till I die, that won’t be the case for my kids. And if Obama could, he would confiscate SSI and all the IRA money people have and give you a “pension” in return. It’s all a house of cards any way you look at it pal. The world’s governments are all broke, and unless we start curtailing all the myriad of “benefit programs,” we weil go bankrupt.
“As a side note to you bro, which side of the political spectrum lies an attitude that a company or govt. entity should not be held liable for it’s contractual guarantees?”
The problem here is that Detroit is simply unable to meet its contractual obligations. THEY DON’T HAVE THE MONEY, AND THEY DON’T HAVE ANY WAY TO GET IT, unless they steal it. The money that should have funded the Detroit pensions was frittered away over decades. It can’t now be “taken away” from either the city or the retirees, since they don’t have it.
The city also has contractual obligations with many employees, vendors, service providers, etc. It has contractual obligations to pay back the money it has borrowed from many creditors. It can’t do any of those things either.
“Do you feel the same way about Social Security? If the govt. can no longer make it’s payments to us retirees, is your attitude still “screw you, suck it up”???????”
This is a completely different problem, because Social Security is NOT a contract. What we pay into social security, and what we receive as benefits, are completely at the mercy of the congress and president in office at the moment. Congress could vote to completely stop social security payments tomorrow, and if the president signed the law it would be 100% legal. No entity in the universe has a contractual obligation to pay social security benefits.
Everything is Unconstitutional or Constitutional, depending on how it fits the Communists that are now in control of the United States agenda.
“No, the judge expects the city should not commit to spending money it doesnt and wont have. Having unlimited taxing authority means prolific spending obligations cannot be dodged via bankruptcy.”
They don’t have unlimited taxing authority. Detroit’s tax rates are already at the maximum the law allows.
Real estate values have crashed, so many properties raise a small fraction of the property tax they used to raise. Many property owners simply don’t pay the tax, and walk away. The city can foreclose the near-worthless properties, but they can’t find buyers for most of them.
Income taxes have a similar problem. There are many fewer people in Detroit, earning much less income, than in better times.
The city can’t meet its obligations. That fact is inescapable, whether the bankruptcy proceeds or is blocked. The city has no way to raise the money to meet its obligations. Most of the money they owe will never be paid back. Their pension contracts will be paid off at a rate less than 100%. Their existing contracts with employees will be voided or radically restructured, or perhaps the paychecks will simply start to bounce.
The injured parties can sue to get what they are owed. Some of them may win judgements. But they won’t recover much money, because Detroit DOES NOT HAVE IT.
Bankruptcy, if the various courts allow it proceed, will stop the injured parties from suing, getting liens on Detroit’s assets, freezing the bank accounts, etc. That’s the “protection” that bankruptcy provides for the debtor.
At this point, no private entity will voluntarily loan Detroit any money until a bankruptcy court shows a plausible way for the money to be repaid. No entity will insure any more of Detroit’s bonds. Detroit will have to make do with the cash in the bank accounts, and whatever pittance of tax revenue comes in day by day.
If the bankruptcy remains blocked for more than a few days, Detroit won’t be able to buy gasoline for the police cars. In a few months, the power company will shut off the lights in city hall because the power bill is delinquent. There’s no plausible limit to how bad things could get.
“Evidently MISERY DOES like company bro, you’re one sick dude...........”
Not sick, just realistic. At the end of the day, there really are NO GUARANTEES!
Honesty at all levels, bot in and out of government, is out the window. Just like Detroit, if your company goes tits up, your ‘guaranteed pension” goes with it unless the business actually put away the required amounts for you throughout our working life. Actually, the “guaranteed benefit” retirement is gone, because the benefits are still tied to investment performance just like IRAs’. You are probably one of the last to have it. And you have to ask yourself, in today’s business environment, just how could we expect business to give any of us “guaranteed” retirements? Only the government still does that, and it is in large measure because of the unholy alliance between the RATS and the PE Unions, and again as we see in Detroit ( and in Wisconsin as well), the PE unions are the next thing to fall by the wayside.
The ol’ ‘promises of politicians’ as canon?
See, IMHO, we have a 13th Amendment. At what point to the promises of the elected become the chains of the Citizenry? When the game is already rigged, EG: no contracts if non-union, what good is an election to accomplish when the deals have already been signed? Taxpayers are NEVER on the mind when these contracts are being penned behind closed doors. The only worry is how much of a kick-back will the elected receive.
Oh, I agree with you guys (even where I was objectively wrong, like with taxation limits).
You’re missing my point: let it crash and burn, let the Left own it, no out, no deflecting responsibility, make them scorch their own earth - stop letting them weasel out and blame the Right.
I agree with you. The weakest of the flock of failing cities is Detroit. Even if you borrowed another trillion from the Chinese to throw at it, 20 more cities are right behind it.
Besides, you would be better off dropping an atom bomb on Detroit and building a new city from scratch.
People just don’t get it. Period.
It’s not just social security and public pensions either. Same story with 401k’s and investment retirement funds. If the market goes bust so does everyone’s retirement.
I suppose people will call on my kids to bail them out of that too. You seem to share my dismay over how many people on this website seem to have that attitude. Why don’t more people feel that way?
To anyone on this forum who reads this - What exactly do my children owe you? What gives you the right to spend their future for your comfort today?
True answer - you don’t have the moral right. Reality is going to bite this nation on the butt in a huge way, it’s not just Detroit. It’s true, Detroit was way ahead of the curve with leftists policies, but the rest of the country - to include many not so liberal places are not too far behind. Let the stock/bond markets tank and see what happens. The entire nation - thanks to the dems and republicrats in D.C. is not very far behind. Few people seem to care that the moral choice today is to share the pain we created with future generations. Most (including many on this site) just want to kick the can because they were promised something.
Stop and think about that - every investor in a pyramid scheme is promised something! Uncle Sugar is now printing away our nations future to keep the pyramid scheme alive - it won’t end well. We are all Detroit.
It’s all going to crash. We are all Detroit. The government is borrowing almost half of every dollar it spends. They will continue to print money and that creates inflation - it’s a killer for everyone.
They won’t stop. Read a social security thread on this forum (a bastion of conservatism) and read the remarks - they were promised something and they are going to get it no matter what! This is why we will print our nation into oblivion. The checks will keep coming until they don’t buy a bag of groceries because they will keep their promises.
If I bought a million dollar house and took out the mortgage in my kids names what would you think of me?
“We are all Detroit.”
Thank you for making crystal clear where we are headed. Our nation will not survive if this “entitlement” society continues because there already isn’t enough money to give the Gibbsmedats everything to which they feel they are entitled. And I concur about those who are posting here about how “unfair”all if this is to those who have been “promised” all these goodies for which they have contributed little or nothing to receive.
Love what you said volunbeer, because it's 100%true. It's actually all over already, most people just don't realize it. The whole thing will boil down to a choice the most coddled generations in history (baby boomers and their parents) will have to make. Is it going to be all about you forever; or do you care that the generations coming after you continue ?
If you want them to be able to continue, and our country along with them, heavy self-sacrifices will have to be made.
Our guaranteed pensions and social security and medicare have broken the bond that naturally once existed between parent and children. That bond saw more than just short-sighted self interest, and looked to the future promise of present sacrifice. We are the inheritors of generations of such self-sacrifice.
But I can't tell you how many times I have heard people of my parents generation and my own (babyboomers) say they're glad they won't be around for the future! They know it will be horrible, but they don't care as long as they get theirs.
My heart sinks when I hear this, because no society can persist in the face of such generational selfishness.
Oh, I’m behind you 1k% w/ letting is go to pot.
Unfortunately, the blacks will never admit that is was their racism (voting in the same, crooked people...over and over, based on their skin color) that did ‘em in. (Marion Barry. HELLO!?). Let alone the ‘no snitch’ and other ‘hood “rules” that keep their streets a war-zone.
Already there are the stories about ‘white flight’ (when it was ‘EVERYONE get out of Dodge’).
There isn’t anyone I’ve seen on the GOP/RNC side that has the guts, yet, to stand up to O and/or the Black Caucus.
Saturday I grilled some ribs. Greasy things, taste good.
Just before shutting it off after removing the rack, a grease fire started.
I cut off the gas, tank under the grill.
Reaching for the knob, one drop of grease dripped and burned my hand. Not bad, but ugly & sore.
Considering options, I just kept the cover on and let it burn out. Could have stopped it earlier other ways, but this way the fire’s fuel was completely eradicated. Inside the grill is a blackened mess, but all outside is ok and the fuel grease gone completely.
There is a fire destroying that culture, and they want us to get burned dealing with it. Put the lid on, cut off the fuel, and let it resolve itself. Anything else will give you painful burns.
Bankruptcy judge shuts down State lawsuits:
Just North of Detwaa is Oakland Country run by a lovable right wing lunatic :-) L Brooks Patterson..
In the Early 90's he convinced his Union Workers to go along with a 401a ( yes there is such a beast cousin to the 401k ) and adopt a Medical Savings Plan as well.
Because of it, they have a AAA Muni Bond Rating.
They pissed and moaned about it at the time, but I bet the guy on the road crew slinging tar for pot hole patches in Oakland County right now with his 401a, would not trade his job or his 401a for a job in Detwaa and their Pension for all the Tea in China...