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Detroit bankruptcy moves forward as judge rules city can shed debt

Fenton

Fenton

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Detroit bankruptcy moves forward as judge rules city can shed debt | Fox News

" Detroit's historic bankruptcy will move forward after a judge ruled Tuesday that the financially crumbling city is eligible to shed billions in debt.

Judge Steven Rhodes turned down objections from unions, pension funds and retirees, which all stand to lose big under any plan to address Detroit's long-term liabilities.

The decision Tuesday was long-awaited, and clears the way for the city to proceed in the largest public bankruptcy in U.S. history.

"This once proud and prosperous city can't pay its debts. It's insolvent. It's eligible for bankruptcy," Rhodes said in announcing his decision. "At the same time, it also has an opportunity for a fresh start."

The plan isn't on the judge's desk yet. The issue for Rhodes, who presided over a nine-day trial, was whether Detroit met specific conditions under federal law to stay in bankruptcy court and turn its finances around after years of mismanagement, chronic population loss and collapse of the middle class.

The city has argued that it needs bankruptcy protection for the sake of beleaguered residents suffering from poor services such as slow to nonexistent police response, darkened streetlights and erratic garbage pickup -- a concern mentioned by the judge during the trial.

Before the July filing, nearly 40 cents of every dollar collected by Detroit was used to pay debt, a figure that could rise to 65 cents without relief through bankruptcy, according to the city. "
 
Damn, pension funds are short 3.5 Billion.

Some of the reasons that caused this, other than corrupt and criminal politicians ripping the city off and having " Hoe-Party's " in the Mayoral Mansion...

Taxing higher and higher: City leaders tried repeatedly to reverse sliding revenue through new taxes. Despite a new income tax in 1962, a new utility tax in 1971 and a new casino revenue tax in 1999 — not to mention several tax increases along the way — revenue in today’s dollars fell 40% from 1962 to 2012. Higher taxes helped drive residents to the suburbs and drove away business. Today, Detroit still doesn’t take in as much tax revenue as it did just from property taxes in 1963.

Downsizing — too little, too late: The total assessed value of Detroit property — a good gauge of the city’s tax base and its ability to pay bills — fell a staggering 77% over the past 50 years in today’s dollars. But through 2004, the city cut only 28% of its workers, even though the money to pay them was drying up. Not until the last decade did Detroit, in desperation, cut half its workforce. The city also failed to take advantage of efficiencies, such as new technology, that enabled enormous productivity gains in the broader economy.

Skyrocketing employee benefits: City leaders allowed legacy costs — the tab for retiree pensions and health care — to spiral out of control even as the State of Michigan and private industry were pushing workers into less costly plans. That placed major stress on the budget and diverted money from services such as streetlights and public safety. Detroit’s spending on retiree health care soared 46% from 2000 to 2012, even as its general fund revenue fell 20%.

Gifting a billion in bonuses: Pension officials handed out about $1 billion in bonuses from the city’s two pension funds to retirees and active city workers from 1985 to 2008. That money — mostly in the form of so-called 13th checks — could have shored up the funds and possibly prevented the city from filing for bankruptcy. If that money had been saved, it would have been worth more than $1.9 billion today to the city and pension funds, by one expert’s estimate

Borrowing more and more: Detroit went on a binge starting around 2000 to close budget holes and to build infrastructure, more than doubling debt to $8 billion by 2012. Under Archer, Detroit sold water and sewer bonds. Kilpatrick, who took office in 2002, used borrowing as his stock answer to budget issues, and Bing borrowed more than $250 million.

Adding the last straw — Kilpatrick’s gamble: He’s best known around the globe for a sex and perjury scandal that sent him to jail and massive corruption that threatens to send him to prison next month for more than 20 years. The corruption cases further eroded Detroit’s image and distracted the city from its fiscal storm. But perhaps the greatest damage Kilpatrick did to the city’s long-term stability was with Wall Street’s help when he borrowed $1.44 billion in a flashy high-finance deal to restructure pension fund debt. That deal, which could cost $2.8 billion over the next 22 years, now represents nearly one-fifth of the city’s debt.


How Detroit went broke: The answers may surprise you — and don't blame Coleman Young | Detroit Free Press | freep.com
 
Fenton said:
Detroit bankruptcy moves forward as judge rules city can shed debt | Fox News

" Detroit's historic bankruptcy will move forward after a judge ruled Tuesday that the financially crumbling city is eligible to shed billions in debt.
Click to expand...

Total, unabashed liberalism on display. They had full control of this city for decades, and you see all their Utopian plans on display. Raise taxes, out of control spending, overpay all the workers. Ignore the free market forces, ignore capitalism. This what you get. Well, libs, what would you have done differently? Maybe they didn't raise taxes enough on the rich? LOL!
The horrifying part about this is that they will not learn a thing from this. Look at what Obama is doing. Oh yeah, didn't he promise that he would not allow Detroit to go bankrupt? Not that he lies much.
 
Anthony60 said:
Total, unabashed liberalism on display. They had full control of this city for decades, and you see all their Utopian plans on display. Raise taxes, out of control spending, overpay all the workers. Ignore the free market forces, ignore capitalism. This what you get. Well, libs, what would you have done differently? Maybe they didn't raise taxes enough on the rich? LOL!
Click to expand...

Never mind, of course, that Michigan has a long record of Republican leadership on the state level. Part of Detroit's woes falls on the state, too, unless you're just going to blame Kwame Kilpatrick for EVERYTHING.

That said, if you think the excesses of one particular set of politicians is somehow an indictment of liberal thought, then you're a hopeless partisan and it's useless attempting to engage in reasonable discourse with you.

Anthony60 said:
The horrifying part about this is that they will not learn a thing from this. Look at what Obama is doing. Oh yeah, didn't he promise that he would not allow Detroit to go bankrupt? Not that he lies much.
Click to expand...

It's patently obvious to anyone with two brain cells to rub together that when Obama said "Detroit," he was referring to the auto industry. Specifically because he was comparing the auto bailout to Romney's statements that he wouldn't have done it.

"Just a few years ago, the auto industry wasn't just struggling - it was flatlining," Mr. Obama said. "GM and Chrysler were on the verge of collapse. Suppliers and distributors were at risk of going under. More than a million jobs across the country were on the line - and not just auto jobs, but the jobs of teachers, small business owners, and everyone in communities that depend on this great American industry."

His administration, he argues, "refused to throw in the towel and do nothing. We refused to let Detroit go bankrupt. We bet on American workers and American ingenuity, and three years later, that bet is paying off in a big way."
Click to expand...

Don't be dishonest.

Obama: I "refused to let Detroit go bankrupt" - CBS News
 
Let's all celebrate the success of the Grand Experiment...

Dancing_skull.gif
 
Kobie said:
Never mind, of course, that Michigan has a long record of Republican leadership on the state level. Part of Detroit's woes falls on the state, too, unless you're just going to blame Kwame Kilpatrick for EVERYTHING.

That said, if you think the excesses of one particular set of politicians is somehow an indictment of liberal thought, then you're a hopeless partisan and it's useless attempting to engage in reasonable discourse with you.



It's patently obvious to anyone with two brain cells to rub together that when Obama said "Detroit," he was referring to the auto industry. Specifically because he was comparing the auto bailout to Romney's statements that he wouldn't have done it.



Don't be dishonest.

Obama: I "refused to let Detroit go bankrupt" - CBS News
Click to expand...

Michigan isn't bankrupt, Detroit is.
 
sawyerloggingon said:
Michigan isn't bankrupt, Detroit is.
Click to expand...

I understand that; however, I would say the state government bears at least some share of responsibility for the fate of Detroit, wouldn't you?
 
Kobie said:
Never mind, of course, that Michigan has a long record of Republican leadership on the state level. Part of Detroit's woes falls on the state, too, unless you're just going to blame Kwame Kilpatrick for EVERYTHING.
Click to expand...

We are talking about Detroit, not Michigan.

That said, if you think the excesses of one particular set of politicians is somehow an indictment of liberal thought, then you're a hopeless partisan and it's useless attempting to engage in reasonable discourse with you.
Click to expand...

Liberals (Democrats)have been in control of Detroit forever. Please advise is I'm wrong.

It's patently obvious to anyone with two brain cells to rub together that when Obama said "Detroit," he was referring to the auto industry. Specifically because he was comparing the auto bailout to Romney's statements that he wouldn't have done it.
Click to expand...

Detroit is the auto industry, or the auto industry is Detroit. Take your pick
 
sawyerloggingon said:
All the guy is saying is that the state didn't ride in like the Calvary at the last second to save Detroit. GOOD I say!
Click to expand...

Most certainly isn't "all he's saying."

Detroit's problems stem from years of mismanagement and corruption, that much is clear. To equate that with "liberalism" is simply partisan BS.
 
Kobie said:
I understand that; however, I would say the state government bears at least some share of responsibility for the fate of Detroit, wouldn't you?
Click to expand...

The unions and the Libbos have had a 50 year party...now it's time for someone to pick up the tab. I vote that the Libbos pay the bill.
 
Kobie said:
Most certainly isn't "all he's saying."

Detroit's problems stem from years of mismanagement and corruption, that much is clear. To equate that with "liberalism" is simply partisan BS.
Click to expand...

Of course we can equate that with Liberalism. The Libbos have been in charge there for decades.
 
Kobie said:
This guy
disagrees.

State could have prevented Detroit bankruptcy, says professor studying struggling U.S. cities | MLive.com

It's fun to blame everything bad on "liberals and unions," but it's bull****.
Click to expand...


That guys an idiot. Harsh yes, but its the truth.

Should the State be held responsible for a populace that would elect someone like Kwami Kirkpatrick to rob them blind and have " Ho Partys" at the Mayoral mansion ?

Should the State be held responsible for a City that spent hundreds of millions more than it took in year after year after year ?

For a City that ran up a 3.5 Billion dollar unfunded Pension fund ?

Sounds like California, who's massive unfunded Teachers pension fund isn't counted against that States debt...for some reason.

Friken Jerry Brown, Lol. Another dishonest Liberal who hopes to God no one digs too deep.

But its too late for Detroit. That city is the culmination of decades of Liberal mismanagment and corruption.

Should the State be responsible for local politicians who with a shrinking tax base decided to increase legacy cost by 46% from 2000 to 2012 ?

Should the State be held responsible for City leaders deciding to pump out close to a billion dollars in bonuses to city workers from 1985 to 2008 ??

Do you understand the concept of responsibillity ? Because Detroit is the eventual conclusion of a Liberals paradise and is a blinding beacon that should be sending out a clear message to the rest of America.

That Liberal policies left unchecked result in disaster....or Detroit.
 
How is Seattle, Portland, New York, and San Francisco doing? What about the blue states vs red states? What about the Nordic, Scandinavian countries?

Oh yeah that's right, we don't like those examples because they aren't in line with your Librulizm = FAILURE narrative.

Oh well, enjoy beating your chests and congratulating yourselves on another strawman.
 
Fenton said:
That guys an idiot. Harsh yes, but its the truth.

Should the State be held responsible for a populace that would elect someone like Kwami Kirkpatrick to rob them blind and have " Ho Partys" at the Mayoral mansion ?

Should the State be held responsible for a City that spent hundreds of millions more than it took in year after year after year ?

For a City that ran up a 3.5 Billion dollar unfunded Pension fund ?

Sounds like California, who's massive unfunded Teachers pension fund isn't counted against that States debt...for some reason.

Friken Jerry Brown, Lol. Another dishonest Liberal who hopes to God no one digs too deep.

But its too late for Detroit. That city is the culmination of decades of Liberal mismanagment and corruption.

Should the State be responsible for local politicians who with a shrinking tax base decided to increase legacy cost by 46% from 2000 to 2012 ?

Should the State be held responsible for City leaders deciding to pump out close to a billion dollars in bonuses to city workers from 1985 to 2008 ??

Do you understand the concept of responsibillity ? Because Detroit is the eventual conclusion of a Liberals paradise and is a blinding beacon that should be sending out a clear message to the rest of America.

That Liberal policies left unchecked result in disaster....or Detroit.
Click to expand...

At what point did I say Kilpatrick's shenanigans were the state's responsibility? Oh, that's right, I didn't. Nice strawman. If you think that "ho parties" are what bankrupted Detroit, however, you're out of your mind.

Obviously, the city was ****ed up. Now, if you want to claim that's "liberalism" as opposed to corruption and sheer incompetence (or, better yet, if you try to equate corruption and incompetence with "liberalism," or rather your asinine caricature of it), then be my guest ... all that does is illustrate that you have no interest in a serious discussion and would rather just play childish partisan games, and as far as I'm concerned you can do that by yourself in the corner.

The guy in the article I cited also said that state money that was earmarked for Detroit (as every state government has for almost every city) was instead being used to plug gaps in the state budget. I see that point was ignored just so you could rant against "liberals," which is pretty much all you do.

It's hard to have any serious substantive discussion when all you do is rant about how much you hate this caricature of liberalism you've created in your head.
 
Verax said:
How is Seattle, Portland, New York, and San Francisco doing? What about the blue states vs red states? What about the Nordic, Scandinavian countries?

Oh yeah that's right, we don't like those examples because they aren't in line with your Librulizm = FAILURE narrative.

Oh well, enjoy beating your chests and congratulating yourselves on another strawman.
Click to expand...

The interesting thing is, it seems to me that a lot of conservatives are THRILLED that Detroit went bankrupt. Because it was run by a Democrat (who was also a corrupt asshole), it allows them to blame Detroit's problems on LIBERALISM, rather than the fact that the city government was a bunch of corrupt assholes. See, in Conservaland, liberalism and corruption are synonyms, just like liberalism and any other bad thing they can think of.
 
Verax said:
How is Seattle, Portland, New York, and San
Francisco doing? What about the blue states vs red states? What about the Nordic, Scandinavian countries?

Oh yeah that's right, we don't like those examples because they aren't in line with your Librulizm = FAILURE narrative.

Oh well, enjoy beating your chests and congratulating yourselves on another strawman.
Click to expand...


LOL !!

No, the consequence of full blown Liberalism and corruption. Apparently they go hand in hand.

Funny you brought up California. Jerry Brown likes to claim a projected balanced budget, but ignores a unfunded pension fund that by Conservative estimates is unfunded by up to 80 billion dollars.

Just because they've hid their debt doesn't mean they're not far behind Detroit, especially when Californians elect someone like Jerry Brown.

Liberals and Democrats lie, so post your examples of a working Liberal paradise, and hope no one digs in to the reality that most liberal locals are either already too far gone to save or quickly on the way to insolvency.

You CANT build an economy on a public sector while you attack your private sector and expect success.

Look at Greece, its exactly what caused them to go bankrupt.
 
Fenton said:
Damn, pension funds are short 3.5 Billion.

Some of the reasons that caused this, other than corrupt and criminal politicians ripping the city off and having " Hoe-Party's " in the Mayoral Mansion...

Taxing higher and higher: City leaders tried repeatedly to reverse sliding revenue through new taxes. Despite a new income tax in 1962, a new utility tax in 1971 and a new casino revenue tax in 1999 — not to mention several tax increases along the way — revenue in today’s dollars fell 40% from 1962 to 2012. Higher taxes helped drive residents to the suburbs and drove away business. Today, Detroit still doesn’t take in as much tax revenue as it did just from property taxes in 1963.

Downsizing — too little, too late: The total assessed value of Detroit property — a good gauge of the city’s tax base and its ability to pay bills — fell a staggering 77% over the past 50 years in today’s dollars. But through 2004, the city cut only 28% of its workers, even though the money to pay them was drying up. Not until the last decade did Detroit, in desperation, cut half its workforce. The city also failed to take advantage of efficiencies, such as new technology, that enabled enormous productivity gains in the broader economy.

Skyrocketing employee benefits: City leaders allowed legacy costs — the tab for retiree pensions and health care — to spiral out of control even as the State of Michigan and private industry were pushing workers into less costly plans. That placed major stress on the budget and diverted money from services such as streetlights and public safety. Detroit’s spending on retiree health care soared 46% from 2000 to 2012, even as its general fund revenue fell 20%.

Gifting a billion in bonuses: Pension officials handed out about $1 billion in bonuses from the city’s two pension funds to retirees and active city workers from 1985 to 2008. That money — mostly in the form of so-called 13th checks — could have shored up the funds and possibly prevented the city from filing for bankruptcy. If that money had been saved, it would have been worth more than $1.9 billion today to the city and pension funds, by one expert’s estimate

Borrowing more and more: Detroit went on a binge starting around 2000 to close budget holes and to build infrastructure, more than doubling debt to $8 billion by 2012. Under Archer, Detroit sold water and sewer bonds. Kilpatrick, who took office in 2002, used borrowing as his stock answer to budget issues, and Bing borrowed more than $250 million.

Adding the last straw — Kilpatrick’s gamble: He’s best known around the globe for a sex and perjury scandal that sent him to jail and massive corruption that threatens to send him to prison next month for more than 20 years. The corruption cases further eroded Detroit’s image and distracted the city from its fiscal storm. But perhaps the greatest damage Kilpatrick did to the city’s long-term stability was with Wall Street’s help when he borrowed $1.44 billion in a flashy high-finance deal to restructure pension fund debt. That deal, which could cost $2.8 billion over the next 22 years, now represents nearly one-fifth of the city’s debt.


How Detroit went broke: The answers may surprise you — and don't blame Coleman Young | Detroit Free Press | freep.com
Click to expand...

Too many promises made to too many people, and not enough money to keep those promises. How many more will there be? Sad...

Greetings, Fenton. :2wave:
 
Kobie said:
The interesting thing is, it seems to me
that a lot of conservatives are THRILLED that Detroit went bankrupt. Because it was run by a Democrat (who was also a corrupt asshole), it allows them to blame Detroit's problems on LIBERALISM, rather than the fact that the city government was a bunch of corrupt assholes. See, in Conservaland, liberalism and corruption are synonyms, just like liberalism and any other bad thing they can think of.
Click to expand...

They DO go hand in hand.

Look there is the greed angle sure. But Liberal Governments turn to corruption because they can't admit that it was their ideology that bankrupted the city, or the pension fund.

Liberals know NO humillity.

So when you build your "workers paradise" by inflating your cities public sector to exponential proportions, and then offer up very generous health plans, retirement, bonus etc that are so expensive they simply cannot be sustained, but you try anyway by increasing taxes on the "big eeebil corpprations and rich people" ( which then causes them to move, and they take their money withe them ) what your left with is a group of city leaders who then start borrowing to perpetuate the plan that was unsustainable from the begining.

Justifying it by saying things like " Obama will bail us out", or " a recovery is right around the corner" when they've already run out their industry.

They finnally run out REAL wealth, ( Corporations and rich folks have left because you taxed them out of your City) so they start borrowing from the pension funds, or sell worthless Munies.

Eventually you wind up with Detroit. They can't hide their debt anymore and HELL YES we Conservatives are using that Cities failure as proof that Liberalism results in misery and complete abject failure.

We care about our Country.
 
Kobie said:
This guy disagrees.

State could have prevented Detroit bankruptcy, says professor studying struggling U.S. cities | MLive.com

It's fun to blame everything bad on "liberals and unions," but it's bull****.
Click to expand...

Interesting read. I especially found this informative...:
“Race aggravates matters. The city is 83% black. Adjacent Oakland County is 77% white, and more than twice as rich,”21 noting there is an undeniable racial element. Detroit has an all black city council and an uninterrupted line of black mayors going back to 1974. With Detroit now under
emergency management, the calculus demonstrates that nearly half of Michigan’s African-American population lives under leaders who were not democratically elected; only 1.3 percent of whites live in the affected areas, according to a May press release from the Detroit chapter of the NAACP, which is
challenging Gov. Snyder’s right to appoint emergency managers.22 The lawsuit claims that the law violates the 14th amendment. Numerous prominent civil rights leaders have denounced the law and Orr’s appointment in particular. Jesse Jackson called it “a dangerous precedent for our nation.”23
Click to expand...
From imbedded link in article

Would this be considered racist?
 
Dickieboy said:
Interesting read. I especially found this informative...:

From imbedded link in article

Would this be considered racist?
Click to expand...

I'm sure somebody probably considers it racist, there's probably some people out there who feel that white bread is racist. But I don't see how it is.
 
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