# detroit bankrupcy what happens next



## miho (Jun 10, 2012)

Just wondering if it gonna affect school, transportation,goverment programs etc... is this s hitting the fan in detroit and will it spread?


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## Smitty901 (Nov 16, 2012)

I am betting it won't be called a bail out. They will stiff the creditors big time. They will funnel money to City workers pension funds.
Then Obama will slip in the back door with some cash for schools and other services that he takes from the rest of us.
Time line election 2016.


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## tango (Apr 12, 2013)

There will be money for the unions, if anyone.


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## Ripon (Dec 22, 2012)

In Stockton union contracts and retirement guarantees are 100% in tact. Creditors who will lose are suing about that but have lost every decision thus far. I have heard it said Detrioit cant fund that, so it will be interesting. If I ws well off and lived there I'd get the $&@K out right now.



tango said:


> There will be money for the unions, if anyone.


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## Inor (Mar 22, 2013)

Bammy will have to do something. I expect it will be something behind the scenes as Smitty suggests. It cannot be too overt, at least not before the 2014 elections. But he also has to let his boyz in Chicago know that he has their back. I expect that when Chicago melts down, it will look a lot like when New York City blew up in the late 70's and early 80's, except they will never elect a Giuliani to put the pieces back together. So Bammy has to let them know that he will cover the losses, just not too directly.

What does scare me, from a prepper perspective, is what happens if/when we start getting a whole rash of municipal bankruptcies from cities the size of Stockton, CA and smaller. No one of them is enough to capture national headlines (beyond a day or two), but taken together it could cause a problem as big or bigger than the housing crash in 2008-09. Municipal bonds are a big time favorite of pension funds and other low-risk retirement funds. If/when they start to fall, it could cause a domino effect even for cities that have been relatively responsible if they have a guaranteed benefits plan for their workers. That might get ugly.


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## Seneca (Nov 16, 2012)

How long a go was it they bailed New York out...It's been a while. Though I don't think they were as bad off then as Detroit is now. Was it in the 70's? Somebody may remember it, the point being, The expense of bailing out Detroit will be a drop In the bucket compared to the waste and fraud that occurs in medicaid/welfare and other such social programs.


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## dwight55 (Nov 9, 2012)

Just the beginning, . . . you can only shuffle losses so long on a table until they start falling off.

Chicago, Miami, Los Angeles, San Francisco, Cleveland, Cincinnati, Houston, Baltimore, Atlanta, New Orleans, St. Louis: none of them are sitting in tall cotton.

Once the bankruptcy begins to take hold, . . . it will start dragging down the rest of the economy. 

Just consider the outrage we saw a few months back when the unions trashed Madison, Wisconsin to the tune of several million dollars, . . . their thug mentality when they don't get their monthly allotment will make the 60's riots look like a May Day dance.

Unions have always lived up to the fact that "Union" was the first word of USSR, . . . and they fully will participate using the typical USSR thuggery.

May God bless,
Dwight


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## tango (Apr 12, 2013)

If anything resembling a bailout is given to Detroit, every other city that is in financial straits will be lining up for theirs.
You can bet they are all watching this very closely.
As I said, something, somehow, will likely be done for the unions, but no one else.


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## Seneca (Nov 16, 2012)

Just another reason to live as far away from a city as possible. 

Bailing out Detroit won't solve the problem, it may shift the focus or alter the appearance of the problem, but it won't solve the problem. 

Government is in some kind of a weird problem solving feedback loop. They solve (or think they solve) a problem, their solution creates another problem to solve, which they solve which in turn creates another problem for them to solve. Job security?

It's as if they have lost sight of the original problem, which they shouldn't have tried to solve in the first place. It's like they lack a fundamental understanding of the nature of problems.


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## MI.oldguy (Apr 18, 2013)

We will have to pay for it.we do eventually anyway.I can think of alot of better uses for my tax dollars,they screwed it all up let them swim for it or sink.


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## retired guard (Mar 7, 2013)

We hear the usual complaints about Union Pensions. I've spent most of my adult life working in "right to work" states so maybe I'm missing some thing, My observation is that PERS is usually a slush fund for politicians giving themselves loans or raking off collected interest. The issue is not that public employees get a pension but that other working Americans don't. Why do we pay junkies, gluttons and alcoholics not to work? Subsidize work you get productivity. Subsidize laziness you get sloth.


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## Ripon (Dec 22, 2012)

You mean 2014 election. The 2016 means very little to o'failure. He'd like "his house" back before 2014 so he can ram something else down the public's throat like obamascare



Smitty901 said:


> I am betting it won't be called a bail out. They will stiff the creditors big time. They will funnel money to City workers pension funds.
> Then Obama will slip in the back door with some cash for schools and other services that he takes from the rest of us.
> Time line election 2016.


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## Ripon (Dec 22, 2012)

There are three crimes in PERS or any other govt. engaged defined benefit pension plan. All three are killing the system and which one is worse I don't know:

1) Government agencies are not adequately funding them. They simply don't set aside enough money with each pay check to provide for the defined benefit.
2) There is no change in the defined benefit when market conditions change. There were people signed in the 90's/00's that expect phat pay outs because
the payout was promised on returns from that era and when the market corrected they never corrected their expecations one dollar = shortfall big time.
3) The one that bothers me most and most complicated but should not be understated is the "gaming" fo the system by unionites and bureacrats. This is 
a long explanation and please don't think its rare - its not:

An employee makes, lets say $60,000, on average for 20 years and is gauranteed 50% of their pay for life after 20 years of service - so $30,000 a year right?
The city/county/state whatever sets aside the "right" amount for them each year and it should all be there right? There should be enough invested to pay 
them $30,000 a year for life. Except this gamer decided to work an extra year or two. This happens in every agency, but I'm going to use schools as an
example. They decide to be vice principle year 21 and for that they get $90,000. In year 22 they get promoted to curriculum pinciple and earn $110,000
and now they retire. Their CONTRACT entitles them to 50% of their average pay of the last 2 years. That is now $100,000 average and their retirement
just went from $30,000 to $50,000 a year for LIFE. The schools did not set aside the money to compensate them for life at $50k a year but $30k a year
and the schools retirement plan is now short the capital it takes to produce $50k a year vs $30k a year as they earned. That is the GAMING of the 
defined benefit plan and I know for a FACT many public agencies base the entire retirement off the ONE last year of their service. Which is stupid pathetic.



retired guard said:


> We hear the usual complaints about Union Pensions. I've spent most of my adult life working in "right to work" states so maybe I'm missing some thing, My observation is that PERS is usually a slush fund for politicians giving themselves loans or raking off collected interest. The issue is not that public employees get a pension but that other working Americans don't. Why do we pay junkies, gluttons and alcoholics not to work? Subsidize work you get productivity. Subsidize laziness you get sloth.


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## retired guard (Mar 7, 2013)

Ripon said:


> There are three crimes in PERS or any other govt. engaged defined benefit pension plan. All three are killing the system and which one is worse I don't know:
> 
> 1) Government agencies are not adequately funding them. They simply don't set aside enough money with each pay check to provide for the defined benefit.
> 2) There is no change in the defined benefit when market conditions change. There were people signed in the 90's/00's that expect phat pay outs because
> ...


I can understand the need for reform. However still begs the question as a society are we going to reward people for working or taking?


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## Ripon (Dec 22, 2012)

As a society we do both right now. Govt employees are now the best paid employees in the world. Earnings in the private sector have corrected but public employees keep on taking and getting more. Reform would be fine, and you'd even think common sense. If you said to the employees we'll give you a defined benefit based on your total pay for total number of years it'd be fair right (no gaming); you watch how they'd kick and scream how unfair that some how - is? I'd say they would also have to accept that with ups and downs in the market their return (defined benefit) might change. And finally the govt entity needs to set aside the money - no more waiting for the retiree claim to put in the money.



retired guard said:


> I can understand the need for reform. However still begs the question as a society are we going to reward people for working or taking?


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## retired guard (Mar 7, 2013)

Ripon said:


> As a society we do both right now. Govt employees are now the best paid employees in the world. Earnings in the private sector have corrected but public employees keep on taking and getting more. Reform would be fine, and you'd even think common sense. If you said to the employees we'll give you a defined benefit based on your total pay for total number of years it'd be fair right (no gaming); you watch how they'd kick and scream how unfair that some how - is? I'd say they would also have to accept that with ups and downs in the market their return (defined benefit) might change. And finally the govt entity needs to set aside the money - no more waiting for the retiree claim to put in the money.


Sorry guy your broad brush is invalidating your argument
State of Nevada Employees have taken repeated cuts to both wages and benefits the result is prior to my retirement last year I was taking home less than I had seven years before despite receiving a promotion. Recently the state with great fan fare announced they were giving back what had been taken away. They didn't mention what they gave back was 2.5% (Far less than they took) They also failed to mention that this coincided with an increase in PERS contributions that ate up the return and a call that since NVPERS was over funded that politicians should be given greater access to the fund to address the states economic woes. I don't think PERS is over funded now but I guarantee it would not be if that came to pass. A popular tactic when attacking compensation packages for state employees is to lump them in with higher compensated City, County and Federal employees as "Government Workers" Another discrepancy is to lump them in with appointed employees who often set their own compensation packages the Director of my former Dept. is paid approx $75K above his pay grade similar findings have been found on Deputy Directors and don't even get started on gubernatorial staff. How did they justify this?That they had saved the state money. What money? The wage cuts, staffing reductions and furloughs they had inflicted on the line staff who do the work. When you hear these arguments(Mine included) consider motivations and what they are not telling you. In my case at least if you think of anything I'll be happy to answer.


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## inceptor (Nov 19, 2012)

Ripon said:


> As a society we do both right now. *Govt employees are now the best paid employees in the world.* Earnings in the private sector have corrected but public employees keep on taking and getting more. Reform would be fine, and you'd even think common sense. If you said to the employees we'll give you a defined benefit based on your total pay for total number of years it'd be fair right (no gaming); you watch how they'd kick and scream how unfair that some how - is? I'd say they would also have to accept that with ups and downs in the market their return (defined benefit) might change. And finally the govt entity needs to set aside the money - no more waiting for the retiree claim to put in the money.


Sorry to bust your bubble there but that is not the truth here. I work for the State of Texas. I have only been with the agency 5 yrs but in that time we have not had a raise until this year. It's a whoppin 1% or $50 per month, whichever is greater. I don't know about other places but we aren't getting rich. Oh, and BTW, me and my co-workers will get the $50.

That could possibly be true for federal employee's but not the state, county or city folks.


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## Ripon (Dec 22, 2012)

With out malice I was accused of painting with a broad brush, but you two fine Preppers are painting with a razor sharp pencil, and my facts are correct;

Which federal worker job pays better: Government or private? - Jan. 31, 2012

Only one group of public employees trails the private sector and that is those with advanced degrees.



inceptor said:


> Sorry to bust your bubble there but that is not the truth here. I work for the State of Texas. I have only been with the agency 5 yrs but in that time we have not had a raise until this year. It's a whoppin 1% or $50 per month, whichever is greater. I don't know about other places but we aren't getting rich. Oh, and BTW, me and my co-workers will get the $50.
> 
> That could possibly be true for federal employee's but not the state, county or city folks.


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## Ripon (Dec 22, 2012)

PS while you guys may not have had raises or suffered furloughs the private sector has slashed wages, hours and benefits.


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## LunaticFringeInc (Nov 20, 2012)

What will happen now you ask? The same thing that happened for Freddy Mac and Fanny Mae, for Chrysler, for Chevy and Solendra. The Tax payers one way or the other are going to end up picking up the check. And you can bet several other cities will be right behind them with their hands out too! So get the KY out...


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## Montana Rancher (Mar 4, 2013)

LunaticFringeInc said:


> What will happen now you ask? The same thing that happened for Freddy Mac and Fanny Mae, for Chrysler, for Chevy and Solendra. The Tax payers one way or the other are going to end up picking up the check. And you can bet several other cities will be right behind them with their hands out too! So get the KY out...


I disagree
Maybe for a bailout or 2 the great Obama (may the gods bless his name) will come to the rescue but in a very short order these bailouts will be allowed to happen.

My suggestion is for any one on a public pension, find a way to cash it out NOW as you may be able to get 50 cents on the dollar.

If you say BS and stay in the system you will be royally screwed within 1 year, yes 1 year write it down and call me a liar.

Of course with the current NSA spying you can address your liar mails to Deerlodge Montana as that is where I will be if not deaded.


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## miho (Jun 10, 2012)

What about those who depend on public aid? I'm not from detroit and thank God got a gopd job but what bout those who don't? if they loose benefits won't they start riots and looting?break ins?higher crime rate? Won't that be perfect excuse for martial law?


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## Smitty901 (Nov 16, 2012)

Look to CA and you may see a way out for the pensions in Detroit.
CA wants to require all workers to put 3% in a retirement account that will be controlled and managed by the State. Now CA has a lot of unfunded State pension plans I wonder where that 3% will end up?
You can bet unless there is a big change in Washington in 2014 and 2016 you and I will get the bill for Detroit and Ca and every other broke liberal State.


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## Piratesailor (Nov 9, 2012)

Simple. You will, via your federal tax dollars, bail out Detroit. The precedent was NYC in the 70's. some say that the current admin will not do it because it would open the flood gates on bail outs but I think it's exactly what he wants. The money will come with federal restriction and added federal control. Besides, he can't let his people go down the tube. He has to save the unions.


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## Piratesailor (Nov 9, 2012)

A general question.. Of all the cities in this "spot" like Detroit, what are the 2 or 3 common factors?


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## LunaticFringeInc (Nov 20, 2012)

With perhaps a few exceptions here are a couple of factors I see in common with all of those cities that are on the brink...(a) Democratic strong hold "Blue" dominated politics, (b) Strong public union influence with generous funded pensions. Exhibit A...Detroit!


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## retired guard (Mar 7, 2013)

Ripon said:


> PS while you guys may not have had raises or suffered furloughs the private sector has slashed wages, hours and benefits.


The pencil comment I can accept I was looking at one state. However you didn't read my post as I stated we received pay cuts plural. Since I never left the private sector either working for nongovernmental entities and or running my own business I don't consider myself insulated from what went on there either. Both sectors suffered but politicians and their cronies like to profit from the suffering while pitting the defrauded against each other to deflect attention from themselves.


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## Ripon (Dec 22, 2012)

Union controlled city hall full of liberals - 100% of the time



Piratesailor said:


> A general question.. Of all the cities in this "spot" like Detroit, what are the 2 or 3 common factors?


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## exmilitary (Jun 17, 2013)

The Detroit bankruptcy thing just proves to us how our bad our governments control our money. This should have never happened.
Any good government would never let this happen. I am sure the tab will be picked up by the hardworking tax payers.

As for what would happen only time will tell. 

I am sure that all parties for governments in the US and around the world are dishonest one way or another. (Just my opinion.) 
The is why we try to vote for the party that will do the least amount of damage to the country. 
I think the next time us citizens vote, we should be vigilante on which party we vote for.;-)


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## Piratesailor (Nov 9, 2012)

Remember I said the Feds will bail out Detroit? Your tax dollars at work? Well you'll bail out Detroit and Chicago and ... And... And. (Plug in any democratic poorly run city)

http://www.nytimes.com/2013/07/29/us/detroit-looks-to-health-law-to-ease-costs.html?_r=0&adxnnl=1&partner=rss&emc=rss&adxnnlx=1375102847-Ck2h3IlUt1xCIcG7bPdjAQ


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## Seneca (Nov 16, 2012)

It does seem that bail outs occur in the "Blue" states and not the "Red" states.


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## Recon33alpha (Feb 13, 2013)

inceptor said:


> Sorry to bust your bubble there but that is not the truth here. I work for the State of Texas. I have only been with the agency 5 yrs but in that time we have not had a raise until this year. It's a whoppin 1% or $50 per month, whichever is greater. I don't know about other places but we aren't getting rich. Oh, and BTW, me and my co-workers will get the $50.
> 
> That could possibly be true for federal employee's but not the state, county or city folks.


As a federal employee we r in the same boat, but we haven't received a cost of living raise in 6 years. I think there is one on the table for fy 14 but not much. I'm an electrician on a naval base, I'm making less money; way less then the private sector; we're not getting rich either. I hate hearing the hub bub about federal employees making 100k a year! I wish. Sad part is without public work employees the ww2 facilities would fall apart and our war heros would suffer most. I'm a veteran, I understand the concerns, and would like to see government controled but you have to look at the top, not the 100's of thousands of lower paid Americans who goto work on military bases, for 1 to ensure bombs and ammo get made but 2 to make a simple living to raise families.


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## BigCheeseStick (Aug 7, 2013)

Times are hard. Everyone's had to tighten their belts a little.

View attachment 2338

I predict his next movie might not be quite as exciting...


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