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Detroit Files for Largest Municipal Bankruptcy in US History

rabbitcaebannog said:
Pension systems are less expensive than setting up 401K systems for public workers.
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Rabbit! Did you pull that out of your hat? Please show a link that defined benefit or defined contribution pension plans are less expensive than 401K's. Respectfully, you don't know what you're talking about. I just can't think of a nicer way to say it right now. ;)
 
rabbitcaebannog said:
No, but I do get to chose which system I get to collect from even though I've contributed quite a bit over my life time to both systems. I may collect less than 10% on my social security though. Pension systems are less expensive than setting up 401K systems for public workers.
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Care to back this bold assertion up? What exactly do you think FERS is? Hint it is far less costly (to the taxpayer) than the CSRS that it replaced. If by less expensive, you mean that ZERO contribution by the gov't worker (for a defined benefit upon retirement - totally funded by the taxpayer) is less expensive than gov't workers putting a percentage of their pay into a pension plan (partially matched by the taxpayer) that has a return based on only what was contributed, then that is very dishonest indeed.
 
haymarket said:
Actually my statement

I just love it how the right libertarians constantly expose their disdain for the common American and in turn favor corporations and the wealthy.
And then you wonder why they cannot even muster 1% in the presidential vote and have to resort to carjacking an established party to get any semblance of power at all.



is not a logical fallacy but a POLITICAL REALITY.
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How does supporting Detroit having to go through normal bankruptcy proceedings equate to "disdain for the common American and in turn favor corporations and the wealthy"?

Explain this please...
 
LowDown said:
What's especially stupid is this "us vs them" mentality with regard to the corporations and the people. What kind of loser isn't connected in some way with corporations in terms of his savings, investments, employment, corporate taxation, or his needs for goods and services? Corporations are the people, or a big part of them.
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Actually it's not stupid at all. With abysmal wage growth over the years most individuals don't have enough to put aside to reap the benefits of strong corporate profits. They would be infinitely better off if that revenue was going to them through wages.
 
MaggieD said:
My knowledge, of course, comes from Illinois. If you paid into Social Security and didn't receive a pension from it, please show a link.
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"and didn't receive a pension from it"

I have no idea what that has to do with it..... I was simply reacting to your statement that teacher did NOT pay into SS.
 
iliveonramen said:
Actually it's not stupid at all. With abysmal wage growth over the years most individuals don't have enough to put aside to reap the benefits of strong corporate profits. They would be infinitely better off if that revenue was going to them through wages.
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Do you have a solution or do you just want to whine? You think the govt. should force a private business to pass profits on to the employees and don't most companies do that through the stock programs? You think the elderly that invested their money into a company by buying stock should be penalized by not getting a return on their investment?
 
Re: Detroit emergency manager files bankruptcy

MMC said:
Because they would have the Fed buy up the Bonds which was totaling 96 Billion in pension liability. Then they would only pay a small portion of their debts. While continuing to spend more money. On everything.....including bad contracts with those outside Illinois.

Which also would include those out of Chicago and its Debts.....as well as it's corruption.

Now what benefits do you think they would have if they Upset the Bond markets? While continuing to get re-elected and still having the support of all their Unions?
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I can't for the life of me figure out why it's okay to use people as collateral damage. It's unjustifiable.
 
haymarket said:
"and didn't receive a pension from it"

I have no idea what that has to do with it..... I was simply reacting to your statement that teacher did NOT pay into SS.
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I assume, then, that you did receive your SS benefits. That's the way it should be -- pay into the system/get the benefits. Wonderful opportunity for teachers in your state.
 
Jack Fabulous said:
How does supporting Detroit having to go through normal bankruptcy proceedings equate to "disdain for the common American and in turn favor corporations and the wealthy"?

Explain this please...
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There is a question as IF future pension liabilities can be considered by the court. There is a serious question as if such future payments would be right and proper to include in this bankruptcy.

http://www.detroitnews.com/article/...bankruptcy?odyssey=tab|topnews|text|FRONTPAGE
 
MaggieD said:
I assume, then, that you did receive your SS benefits. That's the way it should be -- pay into the system/get the benefits. Wonderful opportunity for teachers in your state.
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I do not disagree with you. All I did was see you say that teachers do not pay into SS and wanted to correct that. At least in some states they do. :peace
 
Conservative said:
Do you have a solution or do you just want to whine? You think the govt. should force a private business to pass profits on to the employees and don't most companies do that through the stock programs? You think the elderly that invested their money into a company by buying stock should be penalized by not getting a return on their investment?
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Not sure where you got whining from. It's a fact. Wage growth has stagnated for decades. Productivity has increased and profits are the highest they've been in awhile.

Not sure where you think I'm mentioning there should be no return.

Ha! Stock programs...yeah the median wage is around 30,000 a year so half of Americans make less than that....and you think they are buying shares of their company stock as if they have left over money?
 
Re: Detroit emergency manager files bankruptcy

rabbitcaebannog said:
I can't for the life of me figure out why it's okay to use people as collateral damage. It's unjustifiable.
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The good news is.....so far Congress wont consider it for a State.

Still.....here is Detroit. Way bigger than Stockton California, the first City to file for bankruptcy in the US.

Then what happens if Chicago, NY, or LA.....decide they don't want to pay their debts for the money they have spent and borrowed? Almost like city states with the regions they affect and around them.

I believe I mentioned way back at the beginning of this year. That the Democrats would be going after pension reform. That it would be them.....coming after those Unions. But like Quinn and Emanuel keep telling them. They are going to save their pensions with their reforms.

Leaving them to figure out that part on.....otherwise what, what happens if nothing is done?
 
iliveonramen said:
Not sure where you got whining from. It's a fact. Wage growth has stagnated for decades. Productivity has increased and profits are the highest they've been in awhile.

Not sure where you think I'm mentioning there should be no return.

Ha! Stock programs...yeah the median wage is around 30,000 a year so half of Americans make less than that....and you think they are buying shares of their company stock as if they have left over money?
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Many companies actually give their employees stock as part of their compensation thus no direct payment required. Seems that far too many really have no concept as to how the private sector works but simply buys what the leftwing tells them.

You seem to equate minimum wage with corporate pay. Name for me a corporation that pays minimum wage to its full time employees?
 
Josie said:
UPDATE: Detroit Files for Largest Municipal Bankruptcy in U.S. History | TheBlaze.com

From the Associated Press:
Detroit has become the largest city in U.S. history to file for bankruptcy.
State-appointed emergency manager Kevyn Orr on Thursday asked a federal judge permission to place the city into Chapter 9 bankruptcy protection.
​
Detroit-Bill-Pugliano-Getty-Images-GYI0064050564_0.jpg
Detroit- March 23: Buildings in an entire city block in what was once Detroit’s prime business district sit largly abandoned March 23, 2011. The new census figures show that Detroit has lost 25 percent of its population in the last ten years, bringing the city’s population down to its lowest since 1910. (photo by Bill Pugliano/Getty Images)


Detroit — once the epicenter of the American auto industry — may file for federal bankruptcy as early as Friday morning, the Free Press reports.
“The filing would begin a 30- to 90-day period that will determine whether the city is eligible for Chapter 9 protection and define how many claimants might compete for the limited settlement resources that Detroit has to offer,” the report notes.
“The bankruptcy petition would seek protection from creditors and unions who are renegotiating $18.5 billion in debt and other liabilities,” it adds....
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Wait for the bailout..... :roll:
 
Re: Detroit emergency manager files bankruptcy

MMC said:
The good news is.....so far Congress wont consider it for a State.

Still.....here is Detroit. Way bigger than Stockton California, the first City to file for bankruptcy in the US.

Then what happens if Chicago, NY, or LA.....decide they don't want to pay their debts for the money they have spent and borrowed? Almost like city states with the regions they affect and around them.

I believe I mentioned way back at the beginning of this year. That the Democrats would be going after pension reform. That it would be them.....coming after those Unions. But like Quinn and Emanuel keep telling them. They are going to save their pensions with their reforms.

Leaving them to figure out that part on.....otherwise what, what happens if nothing is done?
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Bankruptcy normally requires a change in behavior except when it comes to the Federal govt. that bails out companies without requiring a change in behavior. Hope that doesn't happen in Detroit for until their is a change in behavior of elected politicians throwing good money after bad just recycles the problem.
 
MaggieD said:
Rabbit! Did you pull that out of your hat? Please show a link that defined benefit or defined contribution pension plans are less expensive than 401K's. Respectfully, you don't know what you're talking about. I just can't think of a nicer way to say it right now. ;)
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Towers Watson, the global human resources consultant, found that pension-style plans beat 401(k)-style offerings by nearly 3 percentage points in 2011, the latest study year. Pensions made investment returns of 2.74% while defined contribution plans lost money, banking -0.22%.

It’s no fluke. Pension plans often beat 401(k) plans. Since 1995, Towers Watson found, defined benefit plans outperformed by 76 basis points annually (0.76%). The did so in nearly all of those years except years in which stocks boomed, such as 2009.

Part of the reason is mutual fund fees. Mutual funds in the plans studied had weighted average expenses of 65 basis points in 2011, a drag which reduced overall returns by 31 basis points. Nearly half of the 401(k)-type plans were composed of mutual funds, compared to just 14% in the pension-style plans.

“The spread between the two has been narrowing, and with many sponsors adjusting the asset allocation strategy of their DB plans to better match assets to liabilities, the disparity may diminish further in the future,” said Chris DeMeo, head of Investment, Americas, at Towers Watson.

Translation: Pension plans do a better job with less risk. Pension Plans Beat 401(k) Savers Silly -- Here's Why - Forbes
 
haymarket said:
There is a question as IF future pension liabilities can be considered by the court. There is a serious question as if such future payments would be right and proper to include in this bankruptcy.

Detroit pension funds sue to block potential bankruptcy | The Detroit News
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This completely avoids the question so I'll ask it again...

How does supporting Detroit having to go through normal bankruptcy proceedings equate to "disdain for the common American and in turn favor corporations and the wealthy"?

Can you answer this honestly or are you going to duck and dodge and pretend that you never said it?
 
ttwtt78640 said:
Care to back this bold assertion up? What exactly do you think FERS is? Hint it is far less costly (to the taxpayer) than the CSRS that it replaced. If by less expensive, you mean that ZERO contribution by the gov't worker (for a defined benefit upon retirement - totally funded by the taxpayer) is less expensive than gov't workers putting a percentage of their pay into a pension plan (partially matched by the taxpayer) that has a return based on only what was contributed, then that is very dishonest indeed.
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"Payments to pension systems account for less than three percent of state budgets. Most of the funds in pension plans are not even provided by taxpayers -- two-thirds of all pension assets are contributed by employees or earned on investments." Harold Schaitberger: 5 Myths About Public Employee Pensions
 
Conservative said:
Many companies actually give their employees stock as part of their compensation thus no direct payment required. Seems that far too many really have no concept as to how the private sector works but simply buys what the leftwing tells them.
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Please be serious. My first job out of college was working at an investment company that managed retirement accounts and stock plans for large corporations. The vast majority of companies have stock purchase programs. Only a handful gave stock directly as compensation and for the most part that stock was in lieu of direct money contributions or matching to a 401k.

Where did I mention minimum wage! I mentioned a fact that half of wage earners in this country receive less than around 30,000 a year.
 
rabbitcaebannog said:
"Payments to pension systems account for less than three percent of state budgets. Most of the funds in pension plans are not even provided by taxpayers -- two-thirds of all pension assets are contributed by employees or earned on investments." Harold Schaitberger: 5 Myths About Public Employee Pensions
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Are you kidding me? Every dime of a gov't employee's pension is paid by the taxpayers. If your gov't employee "salary" is $75K and you put $5K (of that) into "your" pension fund then that is EXACTLY the same thing as paying you $70K and putting $5K into your pension fund. The difference is between paying you out of general revenue (say at 1/2 your salary, with COLA adjustments and full fringe benefits), verses out of your personal retirement account funds (whatever that actually yields and you get no fringe benefits).

Detriot is not a state. Detriot has 9K current workers and 20K now collecting defined benefit pensions (including medical benefits) from them. The Detroit tax base is falling fast, yet its liabilities are increasing fast and it has no ability to borrow more, much less to pay the interest/priciple on that it has already borrowed. Detriot now owes over $9 billion to its pensioners alone and has NOTHING to pay them with. There is not some magical "independent" fund earning money to pay these pensioners, the gov't of Detriot replaced that "fund" with IOU's to spend on other things.
 
Jack Fabulous said:
This completely avoids the question so I'll ask it again...

How does supporting Detroit having to go through normal bankruptcy proceedings equate to "disdain for the common American and in turn favor corporations and the wealthy"?

Can you answer this honestly or are you going to duck and dodge and pretend that you never said it?
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I gave you a clear answer. There are serious questions about why a bankruptcy today should be able to clear the city of its responsibilities down the road that ARE NOT DUE TODAY.
 
ttwtt78640 said:
Are you kidding me? Every dime of a gov't employee's pension is paid by the taxpayers. If your gov't employee "salary" is $75K and you put $5K (of that) into "your" pension fund then that is EXACTLY the same thing as paying you $70K and putting $5K into your pension fund. The difference is between paying you out of general revenue (say at 1/2 your salary, with COLA adjustments and full fringe benefits), verses out of your personal retirement account funds (whatever that actually yields and you get no fringe benefits).

Detriot is not a state. Detriot has 9K current workers and 20K now collecting defined benefit pensions (including medical benefits) from them. The Detroit tax base is falling fast, yet its liabilities are increasing fast and it has no ability to borrow more, much less to pay the interest/priciple on that it has already borrowed. Detriot now owes over $9 billion to its pensioners alone and has NOTHING to pay them with. There is not some magical "independent" fund earning money to pay these pensioners, the gov't of Detriot replaced that "fund" with IOU's to spend on other things.
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False!
 
Re: Detroit emergency manager files bankruptcy

MMC said:
The good news is.....so far Congress wont consider it for a State.

Still.....here is Detroit. Way bigger than Stockton California, the first City to file for bankruptcy in the US.

Then what happens if Chicago, NY, or LA.....decide they don't want to pay their debts for the money they have spent and borrowed? Almost like city states with the regions they affect and around them.

I believe I mentioned way back at the beginning of this year. That the Democrats would be going after pension reform. That it would be them.....coming after those Unions. But like Quinn and Emanuel keep telling them. They are going to save their pensions with their reforms.

Leaving them to figure out that part on.....otherwise what, what happens if nothing is done?
Click to expand...

I'm not convinced there is any good news in this situation. Personally, I think the shock doctrine is just being played out in the city where the doctrine was born. I can't help but look at history and feel this is going to be very bad for us regular folks and not so bad at all for those who will make a killing.

Let's start with the people who are now helping to write laws: Banks' Lobbyists Help in Drafting Financial Bills - NYTimes.com

We're in big trouble unless more people realize what is really going on and what is at stake. Of course just MHO.
 
iliveonramen said:
Please be serious. My first job out of college was working at an investment company that managed retirement accounts and stock plans for large corporations. The vast majority of companies have stock purchase programs. Only a handful gave stock directly as compensation and for the most part that stock was in lieu of direct money contributions or matching to a 401k.

Where did I mention minimum wage! I mentioned a fact that half of wage earners in this country receive less than around 30,000 a year.
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Ever consider that half the people in the country making 30,000 a year or less are doing so because of lack of initiative and drive? As for your claim regarding stock options you are wrong with more companies than you realize giving matching contributions and putting that into a 401k and having the option of the employee putting in nothing and still the employer putting in a percentage of the employee salary

Why don't you come up with a solution to the problem that benefits the employee, the employer, and the consumer? To do so you would have to understand that the end user is the one that drives company decision making and if the company cannot make a profit they will not remain in business.
 
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