Skip to comments.Detroit retirees vote in favor of Pension Cuts
Posted on 07/22/2014 4:12:53 AM PDT by taildragger
Many covering this Story at this early Stage can't be posted on FR.
The Journey to a “Grand Bargain” continues. Other hurdles that need T’s crossed and I’s dotted are the Detroit Institute of the Arts and the Water Department.
I am shocked by this!
They did the right thing...something leftist union folk rarely do.
A hat tip to them :-)
Wait till the imperial federal government wants people to vote social security cuts.
Yes, it restores your faith a bit that when people are posed with a tough dilemma they will go the common sense route. Their options were limited, if they would have said no to this deal, it could have blown-up the entire Bankruptcy ( many moving parts and they will all need to work in unison ) and they could have ended up with a pittance or nothing.
It is obvious that they could either agree to this, or have something worse rammed down their throats. Their pensions and benefits were going to be cut, if not eliminated completely.
I fear that it is still not enough.
More cuts are needed to stem the flow and it will take decades to recover.
Chicago’s pensions continue full speed, cliff ahead.
“Wait till the imperial federal government wants people to vote social security cuts.”
It doesn’t need to do that; right now it simply understates inflation while paying them with de-valued dollars. At the same time, the token president is advocating for minimum wage increases to deal with that very same (officially non-existent) inflation...
“In a separate ballot, retirees also voted to approve a 90% reduction in their health care benefits”
That’s pretty hard to believe...
The people who are owed money are none too happy.
“For one thing, 119 classes of Detroit Water and Sewer Department secured bondholders voted no, compared to 32 that voted yes, presenting a legal hurdle for the city. They voted no, even though they will be paid 100% of their principal, because they are mad at the citys plan to redeem their bonds early.”
“Four groups of unsecured creditors voted no including the stiffest of opponents, a group of bond insurers and hedge funds that control $1.4 billion in pension debt issued by Mayor Kwame Kilpatricks administration in 2005.
I dont think anyones surprised by this, U-Ms Pottow said. Everyone knew the bonds were going to vote no. The big battle were going to have looming is going to be the bondholders. Theyre going to say you cant pay these pensions better than us.
Smaller unsecured creditors, including people who sued the city and are owed settlements, also voted no.”
Why don’t they just turn the Water Dept. over to the U.N.?
What’s a “pension”?
A percentage of something is worth more than 100% of nothing.
They finally realized that.
The "hammer" was bigger.
They sold the Detroit Art Institute to non-profits for $399 million, although they claim the art collection is worth billions. The money goes into the pension.
Sounds like taxpayers have been ripped off.
bondholders will get screwed then.
Remember that when you buy bonds.
Kind of like an Oldmobile...they don't make them anymore.