BREAKING: #Detroit files Chapter 9 bankruptcy petition

[TheVictors]

Quite a few Cali cities and counties have already declared bankruptcy ...of course even OC declaring it in the 90's didn't draw the snarky reaction Detroit has. In San Bernadino there were stories about police and fire dept officials taking full pension, while working again after "retiring."

The drag on the budgets were too much

 

[redandguilty]

...and here we go. We've got a judge calling it unconstitutional (state not federal.)

http://www.usatoday.com/story/news/nation/2013/07/19/detroit-bankruptcy-unconstitutional/2569481/

 

[jswain]

...and here we go. We've got a judge calling it unconstitutional (state not federal.)

http://www.usatoday.com/story/news/nation/2013/07/19/detroit-bankruptcy-unconstitutional/2569481/

County judge has jurisdiction in federal bankruptcy???idk

 

[Mitchrapp]

Detroit is a hole, it was the only option. The right thing to do, decades of economic and population decline amid deteriorating public services and civic conditions. I don't care 1 iota about Detroit but if I had, I'd be celebrating.

 

[kalinecountry]

http://money.cnn.com/2013/07/19/news/economy/detroit-bankruptcy-order/index.html
Judge orders Detroit to withdraw bankruptcy filing.

 

[kalinecountry]

http://www.freep.com/article/201307...V-talk-shows-meet-the-press-this-week-ABC-NBC
Detroit bankruptcy takes center stage on Sunday morning talk shows.

http://www.mlive.com/politics/index.ssf/2013/07/all_eyes_on_detroit_rick_snyde.html
All eyes on Detroit: Rick Snyder, Kevyn Orr, Jennifer Granholm talk bankruptcy on national stage.

http://www.mlive.com/news/detroit/i...y_shakes_up_detroit_e.html#incart_flyout_news
Bankruptcy shakes up Detroit, exposes Michigan and intrigues nation.

http://www.detroitnews.com/article/...18001&template=theme&theme=DETROIT-BANKRUPTCY
BANKRUPT DETROIT: Continuing coverage.

 

[tigersofjustice]

Ultimately, Detroits bankruptcy is a wave. It affects those the most where the wave started, but the ripples go on for a long time and hit basically everything else.

 

[turok]

I could see this coming back in the early 80s when I worked for a freight railroad named ConRail. It was the result of combining ~5 poorly performing railroad companies : Pennsylvania, New York Central, and several smaller. It was initially supported by the federal government by bailout ala Chrysler, but a few years after becoming profitable, management began to cut jobs all over the NE/Midwest region it served, and concentrating operations @ company HQ in Philadelphia.

Eventually Conrail was sold to CSX and CN, with both companies splitting up the profitable parts, and CSX began building sidetracks in the South and Southwest to newly built foreign automakers plants. Prior to that the Japanese automakers had to truck their vehicles all over the country, but saved billions once they were able to ship via rail. This accelerated Detroit's decline in related jobs and industry. The Japanes already had a clear advantage over the domestics due to much lower overhead and legacy costs, since their homeland employees' healthcare expenses and premiums were borne by the Japanese government, their plants were non-union and their amount of retired pensioners were far fewer in number.

 

[kalinecountry]

http://www.zerohedge.com/news/2013-...fall-detroit-will-leave-you-shaking-your-head
25 Facts About The Fall Of Detroit That Will Leave You Shaking Your Head.

 

[redandguilty]

http://www.zerohedge.com/news/2013-...fall-detroit-will-leave-you-shaking-your-head
25 Facts About The Fall Of Detroit That Will Leave You Shaking Your Head.

#3 is the most difficult for me to believe.

 

[Michchamp]

the Detroit bankruptcy made the front page of wiki. read something I had never heard of before:

On August 18, 1970, the NAACP filed suit against Michigan state officials, including Governor William Milliken. The original trial began on April 6, 1971, and lasted for 41 days. The NAACP argued that although schools were not officially segregated (white only), the city of Detroit and its surrounding counties had enacted policies to maintain racial segregation in schools. The NAACP also suggested a direct relationship between unfair housing practices (such as redlining) and educational segregation.
...
http://en.wikipedia.org/wiki/Detroit#cite_note-Meinke2011-36District Judge Steven J. Roth held all levels of government accountable for the segregation. The Sixth Circuit Court affirmed some of the decision, withholding judgment on the relationship of housing inequality with education. The Court specified that it was the state's responsibility to integrate across the segregated metropolitan area.
...
The Governor and other accused officials appealed to the Supreme Court, which took up the case on February 27, 1974.[36] The subsequent Milliken v. Bradley decision would come to have enormous national impact. According to Gary Orfield and Susan E. Eaton in their 1996 book Dismantling Desegregation, the ?Supreme Court?s failure to examine the housing underpinnings of metropolitan segregation? in Milliken made desegregation ?almost impossible? in northern metropolitan areas. ?Suburbs were protected from desegregation by the courts ignoring the origin of their racially segregated housing patterns.?
...
John Mogk, a professor of law and an expert in urban planning at Wayne State University in Detroit says ?Everybody thinks that it was the riots [in 1967] that caused the white families to leave. Some people were leaving at that time but, really, it was after Milliken that you saw mass flight to the suburbs. If the case had gone the other way, it is likely that Detroit would not have experienced the steep decline in its tax base that has occurred since then.
​

Huh. interesting timing, given Monster's comments regarding racially-discriminating laws that appear to be race neutral.

I will have to read this case tonight and learn more about it. had never heard of it.

 

[kalinecountry]

http://www.aflcio.org/Blog/In-The-S...titution-to-Swiss-Cheese#.Ue2ivPOKNAI.twitter
Judge: Detroit Bankruptcy Case Turns State Constitution to ‘Swiss Cheese’.

 

[Michchamp]

this article makes some good points to counter some of the myths being spread out. for those that don't like to read entire articles, or articles from salon.com, period, here's a couple points:

• I keep hearing about how these pension obligations are going to sink Detroit, but the average pension obligation is $19,000. no one is living large on that kinda pension.

• at the same time they're talking about the need to gut these pensions and screw the pensioneers, State officials are stressing the need to honor a $283 MILLION handout to the Red Wings to build a NEW arena to play in.

• quote: "the right blames state and municipal budget problems exclusively on public employees? retirement benefits, often underfunding those public pensions for years. The money raided by those pension funds is then used to enact expensive tax cuts and corporate welfare programs. After years of robbing those pension funds to pay for such giveaways, a crisis inevitably hits, and workers? pension benefits are blamed ? and then slashed. Meanwhile, the massive tax cuts and corporate subsidies are preserved, because we are led to believe they had nothing to do with the crisis"

• quote with links: "we aren?t hearing much about why in the face of such shortfalls Snyder just devoted $1.7 billion to a new corporate tax cut that will likely exacerbate the state?s deficit, nor are we hearing much about why state law compelled Detroit to forfeit other desperately needed tax revenues.

Snyder has been a huge disappointment. for a supposedly well-educated, independent-minded "moderate republican" he's been as much as a brainless hatchet man as Wisconsin's Scott Walker.

 

[redandguilty]

• I keep hearing about how these pension obligations are going to sink Detroit, but the average pension obligation is $19,000. no one is living large on that kinda pension.

Those two things are probably both true. That no one is living large on $19k doesn't mean the unfunded pensions are a huge part of the problem.

I do think funding the pensions are priority 1, but wow, is it a huge pile of debt.

$9.5 billion is for legacy healthcare and pensions. So $14k per resident. Remarkably close to your $19k per pension. I'm assuming a lot of the people owed pensions have left Detroit. I don't know how much of that $14k is healthcare, but you're talking about being in the ballpark of 3 owed pensions for every 4 residents.

 

[Michchamp]

Those two things are probably both true. That no one is living large on $19k doesn't mean the unfunded pensions are a huge part of the problem.

I do think funding the pensions are priority 1, but wow, is it a huge pile of debt.

$9.5 billion is for legacy healthcare and pensions. So $14k per resident. Remarkably close to your $19k per pension. I'm assuming a lot of the people owed pensions have left Detroit. I don't know how much of that $14k is healthcare, but you're talking about being in the ballpark of 3 owed pensions for every 4 residents.

um... if you read the article, it makes the point that the pensions were underfunded because they repeatedly plundered them to hand out cash for dumb construction projects. blame rests with the state and mayor's office, but Wall Street is holding the bag for the bonds/loans for construction. so they can't service these debts? fine. sorry, you shouldn't have loaned money to the city of detroit.

...or you get your buddy in the Governor's office to declare a "fiscal emergency" and appoint a financial manager (this is no longer a democracy for the voters of Detroit at least...) to raid pensioners' retirement funds for the $$$.

let's see who wins... the pensioners/public sector unions who will be labeled "greedy," and have their political power exaggerated beyond belief by the press, when in reality, no one is on their side...not the governer's office, not the GOP-controlled state legislature (thanks to jerrrymandered to hell congressional districts)... AND they no longer have their own mayor or elected officials, since they circumvented that whole "Democracy" thing with the emergency manager law... or "everyone else." my money is on "everyone else."

 

[redandguilty]

um... if you read the article, it makes the point that the pensions were underfunded because they repeatedly plundered them to hand out cash for dumb construction projects. blame rests with the state and mayor's office, but Wall Street is holding the bag for the bonds/loans for construction. so they can't service these debts? fine. sorry, you shouldn't have loaned money to the city of detroit.

...or you get your buddy in the Governor's office to declare a "fiscal emergency" and appoint a financial manager (this is no longer a democracy for the voters of Detroit at least...) to raid pensioners' retirement funds for the $$$.

let's see who wins... the pensioners/public sector unions who will be labeled "greedy," and have their political power exaggerated beyond belief by the press, when in reality, no one is on their side...not the governer's office, not the GOP-controlled state legislature (thanks to jerrrymandered to hell congressional districts)... AND they no longer have their own mayor or elected officials, since they circumvented that whole "Democracy" thing with the emergency manager law... or "everyone else." my money is on "everyone else."

We're not in disagreement there. I'd also say 'too bad' to lenders until the pensions had been paid. ...but regarding pensioners' retirement funds to raid, any clue how much we're talking about? If it's $9.5B underfunded, that $9.5B out of what?

 

[tigersofjustice]

I just hate when pension funds are underfunded. Pensions should be completely separate accounts from all the rest of the county that never gets touched for any reason what so ever. It should never be underfunded because worst case scenario, you could just file for bankruptcy and actually NOT screw over a bunch of retirees. Frankly, this bankruptcy wouldn't be nearly as big of an issue if retirees were not going to get hosed.

 

[Sbee]

I just hate when pension funds are underfunded. Pensions should be completely separate accounts from all the rest of the county that never gets touched for any reason what so ever. It should never be underfunded because worst case scenario, you could just file for bankruptcy and actually NOT screw over a bunch of retirees. Frankly, this bankruptcy wouldn't be nearly as big of an issue if retirees were not going to get hosed.

They can still be unfunded due to more going out than coming in. Its not common but could happen in shrinking cities

Sent from my SAMSUNG-SGH-I747 using Tapatalk 2

 

[kalinecountry]

http://www.nytimes.com/2013/07/23/opinion/getting-detroit-back-on-its-feet.html?ref=opinion&_r=0
Getting Detroit Back on Its Feet.
from the newyorktimes

 

[kalinecountry]

http://www.reuters.com/article/2013/07/27/us-usa-detroit-idUSBRE96Q0A220130727
Michigan attorney general backs pensioners in Detroit bankruptcy.