Detroit's Bankruptcy Goes Far Beyond Its City Limits

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    Detroit's Bankruptcy Goes Far Beyond Its City Limits

    What are the broader implications of the Detroit bankruptcy? The first trend to watch is how state and local governments’ borrowing costs will be affected. Kevyn Orr has proposed deep cuts to Detroit’s so-called “general-obligation” bonds, a controversial move given traditional expectations on Wall Street that these bonds are among the safest credits to invest in. The municipal bond market has already been on edge in recent weeks, following the Federal Reserve’s announcement that it may soon scale back its easy money policy, which has recently facilitated extremely low interest rates for governments, just like all other borrowers. While events in Detroit may not cause investors to be more cautious about lending money to, say, Utah or Westchester County, other Michigan municipalities are extremely concerned that investors will punish them for Detroit’s collapse.

    And will Orr also get away with cutting pensions? Article IX, Section 24 of the Michigan constitution specifically protects accrued public pension benefits from being “diminished or impaired.” But Orr argues that pension costs are unsustainable, that, in bankruptcy, federal law will trump state law, and accordingly has called for “significant cuts in accrued, vested pension amounts for both active and currently retired persons.” Many state and local governments face deeper pension shortfalls than Detroit, and thus will be eager to learn if bankruptcy allows even constitutionally-protected benefits to be slashed.

    However long it takes, bankruptcy will cut Detroit’s debt, but that’s a necessary, not sufficient condition of any revitalization. On its own, bankruptcy can’t reform city government, reduce unemployment, bring down the crime rate, or reverse depopulation. Eventually, Kevyn Orr will exit the stage, and leave those challenges for Detroit’s citizens and public officials to resolve. In the near-term, the task for Detroit city government is usefully simple: bring down the debt. If progress is made on other fronts along the way, private sector actors will most likely be responsible. Government was not the only cause of Detroit’s decline, and will play, at most, a supporting role in the city’s revival.

     
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    Re: Detroit's Bankruptcy Goes Far Beyond Its City Limits

    Detroit is not alone in its challenge.  Many cities face a tremendous and very fundamental challenge: They create a huge amount of value just outside their borders, and they have no way to capitalize on that value.  Detroit's suburbs are among the nations' wealthiest.

    No wealthy suburb would even exist if the city it grew up around hadn't been there first.  If these suburbs were plucked from their metro area and plopped down on their own in the middle of nowhere, few would have any value at all.

    Even for suburbanites who rarely go to the city, their proximity to a city feeds their economy, contributes to their overall quality of life, and boosts their property values significantly. The same property far from any city would be worth much, much less. Yet the city doesn't see a dime of revenue from the suburban propery value it creates - or from a large part of the economic activity.

    Basically, a city creates huge positives for suburbanites while struggling to bear huge internal costs entirely on its own.

     
  3. You have chosen to ignore posts from ComingLiberalCrackup. Show ComingLiberalCrackup's posts

    Re: Detroit's Bankruptcy Goes Far Beyond Its City Limits

    In response to UserName99's comment:

    Detroit is not alone in its challenge.  Many cities face a tremendous and very fundamental challenge: They create a huge amount of value just outside their borders, and they have no way to capitalize on that value.  Detroit's suburbs are among the nations' wealthies.

    No wealthy suburb would even exist if the city it grew up around hadn't been there first.  If these suburbs were plucked from their metro area and plopped down on their own in the middle of nowhere, few would have any value at all.

    Even for suburbanites who rarely go to the city, their proximity to a city feeds their economy, contributes to their overall quality of life, and boosts their property values significantly. The same property far from any city would be worth much, much less. Yet the city doesn't see a dime of revenue from the suburban propery value it creates - or from a large part of the economic activity.

    Basically, a city creates huge positives for suburbanites while struggling to bear huge internal costs entirely on its own.




    Here comes the lame excuses for the massive failure of liberal policies in Detroit.

    9 of the 11 billion owed by Detroit are to an absurdly overstaffed and inefficient public sector, given absurdly high and underserved retirement benefits.  Including a "horse-shoer' position still staffed.

    Poor private sector workers taxed to death, to pay for the gold-plated fattened beyond belief public sector.  No wonder people left for the suburbs.  Instead of blaming people for making sensible decisions to move out of the liberal hellhole, why dont you place blame where it belongs?

     

     
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    Re: Detroit's Bankruptcy Goes Far Beyond Its City Limits

    "And will Orr also get away with cutting pensions?"

    The corrupt Democratic machine gave away to their crooked union buddies absurdly high and unsustainable gold plated benefits for the cronyism machine's thousands of useless 'workers'.

    Didn't know there was a Constitutional right to steal money.....

     
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    Re: Detroit's Bankruptcy Goes Far Beyond Its City Limits

    In response to ComingLiberalCrackup's comment:

    "And will Orr also get away with cutting pensions?"

    The corrupt Democratic machine gave away to their crooked union buddies absurdly high and unsustainable gold plated benefits for the cronyism machine's thousands of useless 'workers'.

    Didn't know there was a Constitutional right to steal money.....



    Whatever.  There are 21,000 Detroit pensioners and the average payment is $19,000 annually for those who worked DECADES for the city.  And many pensioners (like cops and firemen) won't be collecting social security. 

    You think its easy to be a teacher, fireman, or a cop in Detroit?

     
  6. You have chosen to ignore posts from ppannos. Show ppannos's posts

    Re: Detroit's Bankruptcy Goes Far Beyond Its City Limits

    In response to UserName99's comment:

    In response to ComingLiberalCrackup's comment:
    [QUOTE]

     

    "And will Orr also get away with cutting pensions?"

    The corrupt Democratic machine gave away to their crooked union buddies absurdly high and unsustainable gold plated benefits for the cronyism machine's thousands of useless 'workers'.

    Didn't know there was a Constitutional right to steal money.....

     



     

    Whatever.  There are 21,000 Detroit pensioners and the average payment is $19,000 annually for those who worked DECADES for the city.  And many pensioners (like cops and firemen) won't be collecting social security. 

    You think its easy to be a teacher, fireman, or a cop in Detroit?

    [/QUOTE]


    In a word?... VERY.

     
  7. You have chosen to ignore posts from ppannos. Show ppannos's posts

    Re: Detroit's Bankruptcy Goes Far Beyond Its City Limits

    In response to bigdog2's comment:

    In response to UserName99's comment:
    [QUOTE]

     

    Detroit is not alone in its challenge.  Many cities face a tremendous and very fundamental challenge: They create a huge amount of value just outside their borders, and they have no way to capitalize on that value.  Detroit's suburbs are among the nations' wealthiest.

    No wealthy suburb would even exist if the city it grew up around hadn't been there first.  If these suburbs were plucked from their metro area and plopped down on their own in the middle of nowhere, few would have any value at all.

    Even for suburbanites who rarely go to the city, their proximity to a city feeds their economy, contributes to their overall quality of life, and boosts their property values significantly. The same property far from any city would be worth much, much less. Yet the city doesn't see a dime of revenue from the suburban propery value it creates - or from a large part of the economic activity.

    Basically, a city creates huge positives for suburbanites while struggling to bear huge internal costs entirely on its own.

     




     

    To suscribe to this logic, your theory let`s call it, as you provide zero data, links, or backup, we would be asked to believe that Dorchester, Roxbury, and Murderpan, "contribute to the overall quality of life and property values" of say.......Milton? Westwood? Needham? Newton?

    LOL!   The city hurts property values.

    Detroit was/is completely mismanaged by 50 straight years of Democrat mayors and Democrat legislature.

     

    [/QUOTE]


    Coincidence......

     
  8. You have chosen to ignore posts from UserName99. Show UserName99's posts

    Re: Detroit's Bankruptcy Goes Far Beyond Its City Limits

    In response to bigdog2's comment:

     

    In response to UserName99's comment:

     

    Detroit is not alone in its challenge.  Many cities face a tremendous and very fundamental challenge: They create a huge amount of value just outside their borders, and they have no way to capitalize on that value.  Detroit's suburbs are among the nations' wealthiest.

    No wealthy suburb would even exist if the city it grew up around hadn't been there first.  If these suburbs were plucked from their metro area and plopped down on their own in the middle of nowhere, few would have any value at all.

    Even for suburbanites who rarely go to the city, their proximity to a city feeds their economy, contributes to their overall quality of life, and boosts their property values significantly. The same property far from any city would be worth much, much less. Yet the city doesn't see a dime of revenue from the suburban propery value it creates - or from a large part of the economic activity.

    Basically, a city creates huge positives for suburbanites while struggling to bear huge internal costs entirely on its own.

     




     

    To suscribe to this logic, your theory let`s call it, as you provide zero data, links, or backup, we would be asked to believe that Dorchester, Roxbury, and Murderpan, "contribute to the overall quality of life and property values" of say.......Milton? Westwood? Needham? Newton?

    LOL!   The city hurts property values.

    Detroit was/is completely mismanaged by 50 straight years of Democrat mayors and Democrat legislature.

     

     




    Sure thing jmel.....The City of Boston hurts the property values of its suburbs.  Whatever you say.

    And if I use your logic, then Boston would be in the same shape as Detroit......because of democrat rule, wouldn't it? 

     
  9. You have chosen to ignore posts from FortySixAndTwo. Show FortySixAndTwo's posts

    Re: Detroit's Bankruptcy Goes Far Beyond Its City Limits

    In response to UserName99's comment:

    In response to ComingLiberalCrackup's comment:

    [QUOTE]

     

    "And will Orr also get away with cutting pensions?"

    The corrupt Democratic machine gave away to their crooked union buddies absurdly high and unsustainable gold plated benefits for the cronyism machine's thousands of useless 'workers'.

    Didn't know there was a Constitutional right to steal money.....

     



     

    Whatever.  There are 21,000 Detroit pensioners and the average payment is $19,000 annually for those who worked DECADES for the city.  And many pensioners (like cops and firemen) won't be collecting social security. 

    You think its easy to be a teacher, fireman, or a cop in Detroit?

    [/QUOTE]

    The average annual payment is about $19,000, said Bruce Babiarz, a spokesman for the pension funds. And it is about $30,000 for retired police officers and firefighters, who do not get Social Security benefits, he said. Some retired workers get larger pensions, though: about 82 retirees who either worked many years or had high-salaried jobs are paid pensions of more than $90,000 a year, he said.

     
  10. You have chosen to ignore posts from UserName99. Show UserName99's posts

    Re: Detroit's Bankruptcy Goes Far Beyond Its City Limits

    In response to FortySixAndTwo's comment:

    In response to UserName99's comment:

     

    In response to ComingLiberalCrackup's comment:

     

     

    "And will Orr also get away with cutting pensions?"

    The corrupt Democratic machine gave away to their crooked union buddies absurdly high and unsustainable gold plated benefits for the cronyism machine's thousands of useless 'workers'.

    Didn't know there was a Constitutional right to steal money.....

     

     



     

     

    Whatever.  There are 21,000 Detroit pensioners and the average payment is $19,000 annually for those who worked DECADES for the city.  And many pensioners (like cops and firemen) won't be collecting social security. 

    You think its easy to be a teacher, fireman, or a cop in Detroit?



    The average annual payment is about $19,000, said Bruce Babiarz, a spokesman for the pension funds. And it is about $30,000 for retired police officers and firefighters, who do not get Social Security benefits, he said. Some retired workers get larger pensions, though: about 82 retirees who either worked many years or had high-salaried jobs are paid pensions of more than $90,000 a year, he said.

     



    Yes....that is the quote that I got my numbers from.  Some make more, some make less, but it averages out around $19k per person.

    Incidentally, public employees pay taxes too, so if you pay a police chief $150k, about 30% of that goes directly back to the government.  In theory, that could fund the employee's pension or pay for another employee......giving you 2 employees for the cost of 1.

     

     

     
  11. You have chosen to ignore posts from UserName99. Show UserName99's posts

    Re: Detroit's Bankruptcy Goes Far Beyond Its City Limits

    Willfully Ignorant is the proper term for jmel.

    willful ignorance       (noun)
    The practice or act of intentional and blatant avoidance, disregard or disagreement with facts, empirical evidence and well-founded arguements because they oppose or contradict your own existing personal beliefs.

     

     
  12. You have chosen to ignore posts from ppannos. Show ppannos's posts

    Re: Detroit's Bankruptcy Goes Far Beyond Its City Limits

    In response to WhatDoYouWantNow's comment:

    As for housing prices...

     

    My house and yard, if transplanted into Cambridge, would be a couple million easily. Cost a fraction of that in Melrose. Proximity to Boston is part of what drives Cambridge prices up.

    You can disagree if you choose, and you can pick between one and four of the terms defined in the prior post as a moniker.... 




    I wish we could ask Lie-a-watha Warren.. she has at least one multi million dollar mansion in the Peoples Republic of Cambridge.

     
  13. You have chosen to ignore posts from skeeter20. Show skeeter20's posts

    Re: Detroit's Bankruptcy Goes Far Beyond Its City Limits

    In response to UserName99's comment:

    In response to ComingLiberalCrackup's comment:

    [QUOTE]

     

    "And will Orr also get away with cutting pensions?"

    The corrupt Democratic machine gave away to their crooked union buddies absurdly high and unsustainable gold plated benefits for the cronyism machine's thousands of useless 'workers'.

    Didn't know there was a Constitutional right to steal money.....

     



     

    Whatever.  There are 21,000 Detroit pensioners and the average payment is $19,000 annually for those who worked DECADES for the city.  And many pensioners (like cops and firemen) won't be collecting social security. 

    You think its easy to be a teacher, fireman, or a cop in Detroit?

    [/QUOTE]

    In Detriot, it is apparently easier than being a taxpayer.

     
  14. You have chosen to ignore posts from FortySixAndTwo. Show FortySixAndTwo's posts

    Re: Detroit's Bankruptcy Goes Far Beyond Its City Limits

    In response to UserName99's comment:

    In response to FortySixAndTwo's comment:

    [QUOTE]

     

    In response to UserName99's comment:

     

    In response to ComingLiberalCrackup's comment:

     

     

    "And will Orr also get away with cutting pensions?"

    The corrupt Democratic machine gave away to their crooked union buddies absurdly high and unsustainable gold plated benefits for the cronyism machine's thousands of useless 'workers'.

    Didn't know there was a Constitutional right to steal money.....

     

     



     

     

    Whatever.  There are 21,000 Detroit pensioners and the average payment is $19,000 annually for those who worked DECADES for the city.  And many pensioners (like cops and firemen) won't be collecting social security. 

    You think its easy to be a teacher, fireman, or a cop in Detroit?



    The average annual payment is about $19,000, said Bruce Babiarz, a spokesman for the pension funds. And it is about $30,000 for retired police officers and firefighters, who do not get Social Security benefits, he said. Some retired workers get larger pensions, though: about 82 retirees who either worked many years or had high-salaried jobs are paid pensions of more than $90,000 a year, he said.

     

     



    Yes....that is the quote that I got my numbers from.  Some make more, some make less, but it averages out around $19k per person.

     

    Incidentally, public employees pay taxes too, so if you pay a police chief $150k, about 30% of that goes directly back to the government.  In theory, that could fund the employee's pension or pay for another employee......giving you 2 employees for the cost of 1.

     

     

    [/QUOTE]

    $19k being the avg pension is unbelievable. That would mean people worked 30 years with a ending salary of $23,750. Obviously cops and firefighter are making more than that as evidenced by the $30k figure. I don't know any teacher who is making $24k in their first year let alone in year 30. Can't imagine majority of those working at city hall make 24k or less. Hell custodians in Detroit make avg of 26k.  

     
  15. You have chosen to ignore posts from UserName99. Show UserName99's posts

    Re: Detroit's Bankruptcy Goes Far Beyond Its City Limits

    In response to FortySixAndTwo's comment:

    In response to UserName99's comment:
    [QUOTE]

     

    In response to FortySixAndTwo's comment:

    [QUOTE]

     

     

    In response to UserName99's comment:

     

    In response to ComingLiberalCrackup's comment:

     

     

    "And will Orr also get away with cutting pensions?"

    The corrupt Democratic machine gave away to their crooked union buddies absurdly high and unsustainable gold plated benefits for the cronyism machine's thousands of useless 'workers'.

    Didn't know there was a Constitutional right to steal money.....

     

     



     

     

    Whatever.  There are 21,000 Detroit pensioners and the average payment is $19,000 annually for those who worked DECADES for the city.  And many pensioners (like cops and firemen) won't be collecting social security. 

    You think its easy to be a teacher, fireman, or a cop in Detroit?



    The average annual payment is about $19,000, said Bruce Babiarz, a spokesman for the pension funds. And it is about $30,000 for retired police officers and firefighters, who do not get Social Security benefits, he said. Some retired workers get larger pensions, though: about 82 retirees who either worked many years or had high-salaried jobs are paid pensions of more than $90,000 a year, he said.

     

     

     



    Yes....that is the quote that I got my numbers from.  Some make more, some make less, but it averages out around $19k per person.

     

     

    Incidentally, public employees pay taxes too, so if you pay a police chief $150k, about 30% of that goes directly back to the government.  In theory, that could fund the employee's pension or pay for another employee......giving you 2 employees for the cost of 1.

     

     

     

    [/QUOTE]

    $19k being the avg pension is unbelievable. That would mean people worked 30 years with a ending salary of $23,750. Obviously cops and firefighter are making more than that as evidenced by the $30k figure. I don't know any teacher who is making $24k in their first year let alone in year 30. Can't imagine majority of those working at city hall make 24k or less. Hell custodians in Detroit make avg of 26k.  

     

    [/QUOTE]

    The quote came from the people in charge of the pension fund, so i'd think it would be verifyably accurate.  Seems simple, take the pension liabilty and divide by the number of people eligible to collect to get your average. 

     

     

     
  16. You have chosen to ignore posts from Hansoribrother. Show Hansoribrother's posts

    Re: Detroit's Bankruptcy Goes Far Beyond Its City Limits

    In response to WhatDoYouWantNow's comment:

    In response to bigdog2's comment:

     

    [QUOTE]
    "Are you ret@rded in addition to being an angry big mouth? "

     

     

    I found it for you.  And I`m the "angry one"?

    LOL

     

     

     

    What part of insulting you requires me to be angry as opposed to dismissive?

     

    Besides, you yourself said you were angry in a recent post. Wish we had the search function...     

    [/QUOTE]

    What if it were transplanted into Chelsea, Everett,  Revere, Randolph, Quincy? Quincy might be OK, but you are cherry picking for sure.

    This problem is not so easily riddled.

    Affluent people leave cities when they have kids and the public schools stink. Those that can afford the private schools can stay but of course we know the party that is supposedly "for working families" prefers kids to get stuck in lousy public schools

     
  17. You have chosen to ignore posts from ComingLiberalCrackup. Show ComingLiberalCrackup's posts

    Re: Detroit's Bankruptcy Goes Far Beyond Its City Limits

     

    Blue model defenders will point to the cruel exodus of General Motors, the unjust outsourcing of American manufacturing, and the general unfairness of life in the big city as the culprits in the slaying of Detroit. But these champions of the marginalized should keep a few facts in mind.

    Detroit has been spending on average $100 million more than it has taken in for each of the past five years. The city’s $11 billion in unsecured debt includes $6 billion in health and other retirement benefits and $3 billion in retiree pensions for its 20,000 city pensioners, who are slated to receive less than 10 percent of what they were promised. Between 2007 and 2011, an astounding 36 percent of residents lived below the poverty line. Last year, the FBI cited Detroit as having the highest violent crime rate for any major American city. In the first 12 years of the new century, Detroit lost more than 26 percent of its population.

    Progressive politicians, wonks, and activists can only blame big corporations and other liberal bogeymen for so long. The truth is that corrupt machine politics in a one-party system devoted to the blue social model wrecked an entire city and thousands of lives beyond repair. The sooner blues come to terms with this reality, the greater chance other cities will have of avoiding Detroit’s fate.

     
  18. You have chosen to ignore posts from ComingLiberalCrackup. Show ComingLiberalCrackup's posts

    Re: Detroit's Bankruptcy Goes Far Beyond Its City Limits

     

    Surprise, surprise. Detroit is MASSIVELY overstaffed with public sector cronies....it had its own 'stimulus package' for many years...funny how it didnt seem that having a fattened public payroll stimulated the economy...

    But to libs, all public sector jobs are sacrosanct "police and fire" and deserve lifetime tenure and a big fat pension after 20 years at age 50, paid for by private sector workers who are working till they are past 70, and are laid off if they dont produce at their jobs...

    Detroit's work force hasn't shrunk with its population, leaving the cash-strapped city with far more employees than most comparably sized cities.

    The 12,900 workers is much more than similar size Midwestern cities including Indianapolis and Columbus, Ohio, and double much more populous cities including San Jose, Calif.

    Mayor Bing has resisted calls for mass layoffs, saying Detroit's population exodus in the past 10 years was fueled in part by shrinking services.



    From The Detroit News: http://www.detroitnews.com/article/20110425/METRO01/104250352#ixzz2ZpLue66I

     
  19. You have chosen to ignore posts from FortySixAndTwo. Show FortySixAndTwo's posts

    Re: Detroit's Bankruptcy Goes Far Beyond Its City Limits

    In response to UserName99's comment:

    In response to FortySixAndTwo's comment:

    [QUOTE]

     

    In response to UserName99's comment:

    [QUOTE]

     

     

    In response to FortySixAndTwo's comment:

     

    [QUOTE]

     

     

     

    In response to UserName99's comment:

     

    In response to ComingLiberalCrackup's comment:

     

     

    "And will Orr also get away with cutting pensions?"

    The corrupt Democratic machine gave away to their crooked union buddies absurdly high and unsustainable gold plated benefits for the cronyism machine's thousands of useless 'workers'.

    Didn't know there was a Constitutional right to steal money.....

     

     



     

     

    Whatever.  There are 21,000 Detroit pensioners and the average payment is $19,000 annually for those who worked DECADES for the city.  And many pensioners (like cops and firemen) won't be collecting social security. 

    You think its easy to be a teacher, fireman, or a cop in Detroit?



    The average annual payment is about $19,000, said Bruce Babiarz, a spokesman for the pension funds. And it is about $30,000 for retired police officers and firefighters, who do not get Social Security benefits, he said. Some retired workers get larger pensions, though: about 82 retirees who either worked many years or had high-salaried jobs are paid pensions of more than $90,000 a year, he said.

     

     

     

     



    Yes....that is the quote that I got my numbers from.  Some make more, some make less, but it averages out around $19k per person.

     

     

     

    Incidentally, public employees pay taxes too, so if you pay a police chief $150k, about 30% of that goes directly back to the government.  In theory, that could fund the employee's pension or pay for another employee......giving you 2 employees for the cost of 1.

     

     

     

     

    [/QUOTE]

    $19k being the avg pension is unbelievable. That would mean people worked 30 years with a ending salary of $23,750. Obviously cops and firefighter are making more than that as evidenced by the $30k figure. I don't know any teacher who is making $24k in their first year let alone in year 30. Can't imagine majority of those working at city hall make 24k or less. Hell custodians in Detroit make avg of 26k.  

     

     

     

    [/QUOTE]

    The quote came from the people in charge of the pension fund, so i'd think it would be verifyably accurate.  Seems simple, take the pension liabilty and divide by the number of people eligible to collect to get your average. 

     

     

     

    [/QUOTE]

    If it's on the internets it HAS be true. Maybe it is true...although it seems like there are a lot of people working 30 years ending with a salary less than $20K. I dunno....doesn't seem possible.

     
  20. You have chosen to ignore posts from FortySixAndTwo. Show FortySixAndTwo's posts

    Re: Detroit's Bankruptcy Goes Far Beyond Its City Limits

    Have to say...I don't miss being dragged down the rabbit hole by WDYWN. 

     
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    Re: Detroit's Bankruptcy Goes Far Beyond Its City Limits

     

       
     
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