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Michigan attorney general backs pensioners in Detroit bankruptcy
Reuters via Yahoo News ^ | 07/27/2013 | Susan Kelly

Posted on 07/28/2013 5:30:55 AM PDT by SeekAndFind

Michigan's Attorney General Bill Schuette, a Republican, said on Saturday he would defend retirees who risk losing public pensions because of Detroit's bankruptcy, putting him at odds with the city's emergency manager appointed by fellow Republican Governor Rick Snyder.

Schuette, an elected official, said the Michigan state constitution is "crystal clear" in stating that pension plans are a contractual obligation that may not be diminished or impaired.

"Retirees may face a potential financial crisis not of their own making, possibly a result of pension fund mismanagement," Schuette said in a statement.

The attorney general said he would file in federal bankruptcy court on Monday on behalf of the pensioners affected by the biggest municipal bankruptcy filing in U.S. history.

A U.S. bankruptcy court judge on Wednesday dealt a blow to Detroit's public employee unions and pension funds opposed to the filing by suspending legal challenges in Michigan state courts while he reviews the city's petition for protection from creditors.

The city's unions and pension funds had hoped to keep the fight in state court, where they felt Michigan's constitutional protections of retiree benefits would prevail against any efforts by state-appointed Detroit Emergency Manager Kevyn Orr to scale them back.

Judge Steven Rhodes ordered three lawsuits filed by city workers, retirees and pension funds halted and said that applied also to suits against Orr as well as Michigan's governor and treasurer.

(Excerpt) Read more at news.yahoo.com ...


TOPICS: Culture/Society; News/Current Events; US: Michigan
KEYWORDS: bankruptcy; chapter9; detroit; michigan; pension; pensioners; rosemaryaquillina
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1 posted on 07/28/2013 5:30:55 AM PDT by SeekAndFind
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To: SeekAndFind

Lawyers have a higher obligation and this lawyer is living up to it. When the lawyers run the government, this is what happens.


2 posted on 07/28/2013 5:32:21 AM PDT by Bernard (The Road To Hell is not paved with good results.)
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To: SeekAndFind

The idea that these retirees don’t share the blame is just absurd. They voted in politicians promising benefits that any thinking adult knows would never be sustainable. Ignorance is no defense....


3 posted on 07/28/2013 5:33:24 AM PDT by C. Edmund Wright (Tokyo Rove is more than a name, it's a GREAT WEBSITE)
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To: SeekAndFind

Those stupid pie-in-the-sky promises need to be nipped in the bud. They are about $9 billion of the $11 billion debt obligations.


4 posted on 07/28/2013 5:35:32 AM PDT by GeronL
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To: C. Edmund Wright

I’m not sure if one can squeeze blood from a stone.


5 posted on 07/28/2013 5:35:53 AM PDT by SeekAndFind
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To: SeekAndFind

Idiot!! There are all KINDS of promises and contracts that NEED to be broken.


6 posted on 07/28/2013 5:36:12 AM PDT by Ann Archy (Abortion.....the HUMAN Sacrifice to the god of Convenience.)
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To: SeekAndFind
One fact always remains:

the account is drained; there is no money.

7 posted on 07/28/2013 5:38:43 AM PDT by JPG (Obama Does Egypt.)
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To: GeronL

http://dalekboi.tumblr.com/post/50407027361/brentwalker092-gay-legion-top-face-vs-bottom";

In the early ‘80’s my landlord was a retired alcoholic Detroit cop. He’d retired, he said, on full salary after 20 years. He told me about the good old days when they beat confessions out of people. He said he was getting more money now than when he was a cop as he got a raise every time his former coworkers did. I asked him how the city could continue to essentially keep every employee it had ever had on the roles forever. He never did answer that. As I recall, it was like bringing two south poles of a magnet together. He couldn’t even ask himself the question.


8 posted on 07/28/2013 5:51:05 AM PDT by Gen.Blather
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To: Gen.Blather

They have few services left because all the budget goes to salaries and pensions. Half the fire trucks and ambulances can’t run, the cops hardly go out unless it sounds really bad and then a 911 call can take an hour.

They can’t fix streets, can’t light the street lamps, the vast majority of parks are closed and have been since about 2008. Maybe they to recall some of those ex-cops and ex-park employees to come and work for those pensions if they are still abled.

The rest, in lieu of losing a portion of their pension, can take a free house of their choosing, they have about 75,000 abandoned properties, after all. Can’t afford to tear them down.


9 posted on 07/28/2013 5:57:25 AM PDT by GeronL
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To: SeekAndFind

This is an easy fix, have an emergency vote and change the constitution. You ask the taxpayers in the rest of the state if they want to increase their taxes to pay for Detroit’s pensioners to change to constitution to reduce pensions no lower then what social security would pay.


10 posted on 07/28/2013 5:59:09 AM PDT by McGavin999
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To: GeronL

“Maybe they to recall some of those ex-cops and ex-park employees to come and work for those pensions if they are still abled.”

Here’s the interesting thing. I’ve known several former public “servants” who have been retied and collecting significant checks for longer than they worked. I’ve never seen a group less interested in actually doing anything productive; rather they only pursue their own pleasure. I cautioned one that Connecticut was on the verge of bankruptcy and perhaps he should get a job. (He’s never saved even a modest amount, always having spent his stipend to the max. I suspect, because he expects to get it for the rest of his life, so why bother leaving any to the family? Seriously.) He was incensed that he should have to work. He’d already put in his twenty and the rest was for him. I’ve worked 36 years and I’d go to work tomorrow if a job was offered. (I was laid off in 2011; thank you Obama.)


11 posted on 07/28/2013 6:04:47 AM PDT by Gen.Blather
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To: SeekAndFind
Unbridled greed is a bad system to run your life with, to run a union with, to run a city with, or to run a state or a nation with.

Unbridled greed is, however, a very effective way to build bubbles, and when it's used to manage governments, those bubbles eventually pop like a brain aneurism.

Welcome to Detroit. Welcome to Amerika.

12 posted on 07/28/2013 6:05:06 AM PDT by GBA (Our obamanation: Romans 1:18-32)
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To: McGavin999

That is a rather complex solution

The easy fix is to have the President issue an executive order allowing the pension insurance board to take over responsibility and pay the retirees.

The retired are taken care of. Those on the payroll lose out.

The president is a hero

That is what will happen


13 posted on 07/28/2013 6:07:05 AM PDT by bert ((K.E. N.P. N.C. +12 ..... Travon... Felony assault and battery hate crime)
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To: SeekAndFind
My Dad worked for Polaroid for 40 years.As some of you may remember Polaroid,from about 1950-1980 was the darling of American technology and ingenuity with Edwin Land being the nation's Bill Gates/Steve Jobs.But then digital cameras came to be and “instant” photography became obsolete overnight,driving the company to bankruptcy (with Kodak following a few years later).My Dad *worked* for a living...producing something that people *wanted* (or even *needed*) and yet his pension went kaboom! There's no reason why these fat a$$ed government hacks can't take a “haircut” like my Dad did.No reason WHATSOEVER!
14 posted on 07/28/2013 6:26:05 AM PDT by Gay State Conservative (If Obama Had A City It Would Look Like Detroit.)
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To: McGavin999

RE: This is an easy fix, have an emergency vote and change the constitution.

Mark my words... they will ask Obama to rescue them (just like he did GM).

In the end, the rest of us pay for this.

Obama OWES the unions and he’s going to find ways to deliver.

The only problem with doing that is this sets a very bad precedent. What’s to stop the next bankrupt big city from doing the same?

And if they litigate all the way to the Supreme Courts, what’s to stop the left wing of the court from invoking “equal protection” (i.e., you protect Detroit, you’ll have to protect say, Philadelphia)?


15 posted on 07/28/2013 6:27:17 AM PDT by SeekAndFind
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To: bert

RE: The easy fix is to have the President issue an executive order allowing the pension insurance board to take over responsibility and pay the retirees.

Next question — where will this pension insurance board get the money?


16 posted on 07/28/2013 6:28:22 AM PDT by SeekAndFind
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To: SeekAndFind; All
Living here in MI, I saw this other day and wanted to post it, but got busy. The sad part is Tea Partier's worked their @$$es off for Snyder and the AG to get them in. To this point he has been good, but I disagree with him on this one.

It maybe law, but the rest of us Smucks pick up the tab for Detroit's Theft, Corruption, and Insubordination? Are you kidding me?

Where is the X number of Billion that the Pensions are short going to come from @ the State Level?

We can't even get the Legislature to come up with a couple of Billion over 10 years to finally fix and upgrade Michigan roads?

Where is the magic bullet of inflows to the State Coffers to make this up? Are you going to "Frac" Michigan until it looks like a Spagetti Collander to get the tax revenue?

Dangerous precident here, just like GM and what they did with their Pensions and it will have set a template for other States.

Look I have been with firms that were going south and had the attenna up enough to know to get the heck out, So why should I hold the bag for these civil servants? Didn't they see it coming? If they don't have ERISA backing ( which I hear is correct ) maybe they need to self insure or purchase insurance on their pensions in the future. Once they see the rates on that, then maybe they will hire some Fiduciaries with some common sense...

17 posted on 07/28/2013 6:28:39 AM PDT by taildragger (The E-GOP won't know what hit them, The Party of Reagan is almost here, hang tight folks.....th)
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To: SeekAndFind

If some court demands that Detroit pensioners’ pension funds must be “made whole”

(that the funds are legally owed ALL unfunded liabilities related to prior pension agreemnets)

then

THAT is something that can ONLY be accomplished

(a) gradually over time [not likely to be made whole immediately, in the short term, and maybe not in a decade) and
(b) with immediate and long term adjustments to the pensions of all new city employees (the same promises cannot be made to them)

OR ELSE the fiscal recovery of Detroit and its ability to eventually meet those obligations AND OPERATE will not be possible.

Meeting the unfunded obligations of pensioners already in the pension funds is only possible with a plan that ONLY expects to make them whole by the time all current unretired city employees in the plans actually retire, by closing all the current pension plans to new employees, and making lower pension promises to all new employees and using some of the savings to help pay off the underfunded pension liabilities the city did not pay enough on in prior years.

The city’s response to the attorney general should be clear, that it can only meet him one quarter of the way -

(1) past promises to people already in the plans will be meet,

(2) but that will only occur, financially, in time, over many years, possibly lasting until the last of those already in the plans retire, and

(3) all current pension plans will be closed to new employees; new employees will be given different pension plans with lower promises than what was made to city employees in the past.


18 posted on 07/28/2013 6:36:04 AM PDT by Wuli
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To: SeekAndFind

——where will this pension insurance board get the money?-—

I really do not know but believe that employers with pension plans pay into the insurance. It now exists to protect corporate pensions from bankruptcies but that is not an obstacle for a President already gone wild to protect his union cronies.


19 posted on 07/28/2013 6:43:44 AM PDT by bert ((K.E. N.P. N.C. +12 ..... Travon... Felony assault and battery hate crime)
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To: Wuli
all current pension plans will be closed to new employees

See Oakland County to the North of Detwaa with their AAA bond rating and a 401a not a 401k, yes their is such a beast.

IMHO no more defined benefit plan for current and new Detwaa Employee's. Freeze the exisiting pension(s), get them new management ( Vanguard and all other low cost investment houses, are you listening ? ) and give them a 401k, 401a, 403bm 457, anything, but no more defined contribution plans period.

20 posted on 07/28/2013 6:46:19 AM PDT by taildragger (The E-GOP won't know what hit them, The Party of Reagan is almost here, hang tight folks.....th)
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To: Gen.Blather

There are many retired from the US government doing the same thing. Many with only a couple years of service expecting a lifetime of benefits.


21 posted on 07/28/2013 6:47:59 AM PDT by Racer1
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To: McGavin999
The Michigan State Constitution seems to guarentee these pensioners their pensions. There has yet to be any damage to them by this B/K. There will be and when there is the the pensioners should go after the state to get their money. The state of Michigan and it's taxpayers may well be on the hook for this.
22 posted on 07/28/2013 6:48:48 AM PDT by Captain Compassion
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To: Racer1

“Many with only a couple years of service expecting a lifetime of benefits.”

Their sense of entitlement is awesome. I have never known anybody else who expected a lifetime of pay and medical benefits for so little of their lifetime spent. Every company I worked for is either out of business or laid me off long before I could have retired. I have only my 401k and (yeah, sure) Social Security. I expect that eventually SS payments will be tied to means, meaning if you scrimped and saved you won’t get any.


23 posted on 07/28/2013 6:51:11 AM PDT by Gen.Blather
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To: SeekAndFind

What higher office is this guy planning on running for?


24 posted on 07/28/2013 6:55:32 AM PDT by Old Retired Army Guy
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To: taildragger

“anything, but no more defined contribution plans period”

You are “preaching to the choir” on that one.


25 posted on 07/28/2013 7:17:52 AM PDT by Wuli
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To: SeekAndFind

What’s so bad about Detroit? It takes an hour for the ambulance to get there? Try living on a farm or ranch. You get hurt and you get thrown in the back of a pickup. Only 40% of the streetlights work? You have to pay every month for your yard light on the farm. Don’t pay the bill and the power company shuts the light off. Empty houses? The past 100 years has seen the movement of Americans from the country to the city. In my state, the number of rural schools has dropped dramatically. The kids just have to get up earlier to go to a different school. The world changes. Detroit has to change. It’s not unfair, it just is.


26 posted on 07/28/2013 7:38:12 AM PDT by blueunicorn6 ("A crack shot and a good dancer")
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To: SeekAndFind

“...the Michigan state constitution is “crystal clear” in stating that pension plans are a contractual obligation that may not be diminished or impaired.”

However, the rules of contracts change when one of the parties enters into bankruptcy.

So if a judge rules that having an emergency manager for a city comes under bankruptcy law, even if it is not in official bankruptcy, then the contracts are under court control and discretion, and the Attorney General can go pound sand.


27 posted on 07/28/2013 7:43:31 AM PDT by yefragetuwrabrumuy (Be Brave! Fear is just the opposite of Nar!)
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To: SeekAndFind

These bastards are delusional....THERE IS NO MONEY...make laws all you want to pad your corrupt asses but the day of reckoning has arrived. See how the people who are forced to pay this crap reacts when you force them to bail these union assholes out!!!!


28 posted on 07/28/2013 8:15:24 AM PDT by ontap (***)
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To: Springman; cyclotic; netmilsmom; RatsDawg; PGalt; FreedomHammer; queenkathy; madison10; ...
I don't like it but I think Schuette doesn't have much choice in this situation. He has a duty to the Michigan constitution and protecting these pensions is unfortunately in our constitution.

Frankly I'm hoping he runs for governor some day.

Image Hosted by ImageShack.us

Michigan legislative action thread
29 posted on 07/28/2013 9:17:45 AM PDT by cripplecreek (REMEMBER THE RIVER RAISIN!)
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To: Old Retired Army Guy

Hopefully governor. He’s a far better AG than most and in this case the state constitution says the pensions are protected and his job is to uphold the state constitution. However with this in bankruptcy his power is limited.

Frankly he makes Rick Snyder look like Michael Moore in comparison.


30 posted on 07/28/2013 9:24:33 AM PDT by cripplecreek (REMEMBER THE RIVER RAISIN!)
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To: McGavin999
This is an easy fix, have an emergency vote and change the constitution. You ask the taxpayers in the rest of the state if they want to increase their taxes to pay for Detroit’s pensioners to change to constitution to reduce pensions no lower then what social security would pay.

I'd rather have this as an amendment:

Fiscal Responsibility Amendment
Section I
The power of Congress to regulate the value of the dollar is hereby repealed.

Section II
The value of the Dollar shall be one fifteen-hundredth avoirdupois ounce of gold of which impurities do not exceed one part per thousand.

Section III
To guard against Congress using its authority over weights and measures to bypass Section I, the ounce in Section II is approximately 28.3495 grams (SI).

Section IV
The Secretary of the Treasury shall annually report the gold physically in its possession; this report shall be publicly available.

Section V
The power of the Congress to assume debt is hereby restricted: the congress shall assume no debt that shall cause the total obligations of the United States to exceed one hundred ten percent of the amount last reported by the Secretary of the Treasury.

Section VI
Any government agent, officer, judge, justice, employee, representative, or congressman causing gold to be confiscated from a private citizen shall be tried for theft and upon convection shall:
     a. be removed from office (and fired, if an employee),
     b. forfeit all pension and retirement benefits,
     c. pay all legal costs, and
     d. restore to the bereaved twice the amount in controversy

Section VII
The federal government shall assume no obligation lacking funding, neither shall it lay such obligation on any of the several States, any subdivision thereof, or any place under the jurisdiction of the United States. All unfunded liabilities heretofore assumed by the United States are void.

Section VIII
The federal government shall make all payments to its employees or the several states in physical gold. Misappropriation, malfeasance and/or misfeasance of these funds shall be considered confiscation.

31 posted on 07/28/2013 11:41:55 AM PDT by OneWingedShark (Q: Why am I here? A: To do Justly, to love mercy, and to walk humbly with my God.)
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To: C. Edmund Wright
The idea that these retirees don’t share the blame is just absurd. They voted in politicians promising benefits

Your statement is absurd, you know no such thing. I know many retirees from the city of Detroit who are died in the wool conservatives who would never have voted for any of those people. Why, you ask?

BECAUSE THEY DON'T LIVE IN THE CITY OF DETROIT, THEY ONLY WORKED THERE!

Did that thought ever cross your mind?......Sheesh!

32 posted on 07/28/2013 1:34:15 PM PDT by Hot Tabasco (')
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To: Gen.Blather
a retired alcoholic Detroit cop. He’d retired, he said, on full salary after 20 years...He said he was getting more money now

Did it ever occur to you that your friend just might be full of shit? 20 years? Why don't you ask him if his retirement was a disability retirement which was common amongst Detroit cops of his day. And for what it's worth, retired cops never received their contractual raises until the DPOA filed suit back in the 1990's and it took years before the court finally decided the lawsuit in favor of the DPOA in approx. 2002 and granted the retirees the monies they were entitled to, retroactive and payable in three year installments.

With that being said, ask your friend if he is receiving Social Security benefits?

As a side note, my dad retired from the DPOA in 1978 as an Executive Lieutenant........

33 posted on 07/28/2013 1:58:13 PM PDT by Hot Tabasco (')
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To: OneWingedShark

That’s all fine but it has nothing to do with the State Constitution forbidding the change in pensions.


34 posted on 07/28/2013 5:06:59 PM PDT by McGavin999
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To: bert

I thought the only one who could issue law or rules regarding taxpayer dollars is the house of representatives. They hold the purse strings not the president.


35 posted on 07/28/2013 5:09:11 PM PDT by McGavin999
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To: McGavin999

That is in my view naive.

President will do as he pleases and will have reason and justification that will carry the day. The courts will not over rule his usurpation


36 posted on 07/28/2013 5:13:02 PM PDT by bert ((K.E. N.P. N.C. +12 ..... Travon... Felony assault and battery hate crime)
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To: McGavin999

The congress has already acted. It established the Pension Guarantee co. The president will pervert that money pot o take care of the Deetroit pensioners


37 posted on 07/28/2013 5:17:29 PM PDT by bert ((K.E. N.P. N.C. +12 ..... Travon... Felony assault and battery hate crime)
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To: Hot Tabasco

“Did it ever occur to you that your friend just might be full of shit? “

He was full of Scotch. I never saw him sober, not even in the morning. He was thoroughly unpleasant. He asked me questions about a gun I had in the bottom of my lowest dresser drawer, meaning he’d searched the place while I wasn’t there. I would never call somebody friend who told me he had beaten confessions out of people and obviously enjoyed it. He was disabled, but I have no idea from what or when. I’d suspect that Scotch was always his biggest disability.


38 posted on 07/28/2013 6:00:29 PM PDT by Gen.Blather
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To: Hot Tabasco

Take your Michigan kool aid and go away. The idea that I was generalizing was way over your head. I don’t care to stoop down to your intel level. The unions never ever ever ever ever ever ever vote conservative in the majority ever. Sorry, facts are stubborn things. I am sorry for your friends. The writing was on the wall 30 years ago.


39 posted on 07/28/2013 6:20:44 PM PDT by C. Edmund Wright (Tokyo Rove is more than a name, it's a GREAT WEBSITE)
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To: Hot Tabasco

So your dad worked from roughly 1948 til 1978 - and you’re basing your inane comments on that time frame.
SHEEEEEEEEEEEEESH!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!


40 posted on 07/28/2013 6:22:21 PM PDT by C. Edmund Wright (Tokyo Rove is more than a name, it's a GREAT WEBSITE)
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To: Hot Tabasco

So your dad worked from roughly 1948 til 1978 - and you’re basing your inane comments on that time frame.
SHEEEEEEEEEEEEESH!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!


41 posted on 07/28/2013 6:22:31 PM PDT by C. Edmund Wright (Tokyo Rove is more than a name, it's a GREAT WEBSITE)
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To: Hot Tabasco

So your dad worked from roughly 1948 til 1978 - and you’re basing your inane comments on that time frame.
SHEEEEEEEEEEEEESH!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!


42 posted on 07/28/2013 6:22:37 PM PDT by C. Edmund Wright (Tokyo Rove is more than a name, it's a GREAT WEBSITE)
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To: McGavin999

Then the state constitution is fatally flawed, much like detroit......


43 posted on 07/28/2013 6:24:01 PM PDT by C. Edmund Wright (Tokyo Rove is more than a name, it's a GREAT WEBSITE)
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To: C. Edmund Wright

Illinois has a similar provision in its Constitution. A school teacher acquaintance of mine pointed that out to me one day. I replied “Well then when the State is completely broke you can take your copy of the Illinois Constitution down to the bank and try cashing it.”.

The look on her face was priceless. The real irony of the conversation? She’s a math teacher.


44 posted on 07/28/2013 6:30:31 PM PDT by Lurker (Violence is rarely the answer. But when it is it is the only answer.)
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To: SeekAndFind

So Michigan can go bankrupt also it seems.


45 posted on 07/28/2013 6:34:26 PM PDT by KevinB (A country that would elect Barack Obama president twice is no longer worth fighting for.)
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To: Lurker

I’m not a math teacher, I don’t play one on TV, and I didn’t even stay at a Holiday Inn Express last night - but I’ve known for decades that this crap was not sustainable. There is no exucse for gullible union members - SORRY.

There will be more to follow. When the money’s gone, the union contract/pension/state constitution is worthless. Like some other writer said, the Michigan constitution has ruled reality unconstitutional. Good luck with that.


46 posted on 07/28/2013 6:38:26 PM PDT by C. Edmund Wright (Tokyo Rove is more than a name, it's a GREAT WEBSITE)
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To: SeekAndFind
Next question — where will this pension insurance board get the money?

Thanks for saving me the trouble of posting that. :-)

47 posted on 07/28/2013 6:55:49 PM PDT by KevinB (A country that would elect Barack Obama president twice is no longer worth fighting for.)
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To: Hot Tabasco

HT, for your reading pleasure...
http://www.americanthinker.com/2013/07/schadenfreude_michigan_and_mitts_big_fumble.html


48 posted on 07/28/2013 6:59:09 PM PDT by C. Edmund Wright (Tokyo Rove is more than a name, it's a GREAT WEBSITE)
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To: KevinB; SeekAndFind

I think we all know the gist.

They will announce that everyone in Michigan will be covered and have to pay into the “system” that is really going to cover the Detroit pensioners.

Most or all large corporations that had defined benefit plans by law had to fully fund it every year or they’d be gone after by the feds. Plus there is/was a system in place that if the corporation went belly-up that the pensioners still got a portion of the money that had already been funded.

Too bad the government was EXEMPTED from having to fully fund their pensions like the private sector with the defined benefits had to do.


49 posted on 07/28/2013 7:00:26 PM PDT by GeronL
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To: Wuli
“anything, but no more defined contribution plans period”

It's defined benefit plans not defined contribution plans that are the problem.

50 posted on 07/28/2013 7:02:30 PM PDT by KevinB (A country that would elect Barack Obama president twice is no longer worth fighting for.)
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