It is in the news so I suppose a city can do this but where does it all lead to?
Quote
The US city of Detroit in Michigan has become the largest American city ever to file for bankruptcy, with debts of at least $15bn (£10bn).
State-appointed emergency manager Kevyn Orr asked a federal judge to place the city into bankruptcy protection.
If approved, he would be allowed to liquidate city assets to satisfy creditors and pensions.
Detroit stopped unsecured-debt payments last month to keep the city running as Mr Orr negotiated with creditors.
He proposed a deal last month in which creditors would accept 10 cents on the dollar of what they were owed. Mr Orr suggested at the time there was a 50-50 chance of the city needing to file for bankruptcy.
In a letter accompanying Thursday's filing, Michigan's Governor Rick Snyder, a Republican, said he had approved the request from Mr Orr to file for Chapter 9 bankruptcy.
Gov Snyder said: "Only one feasible path offers a way out," adding that residents needed a clear exit from the "cycle of ever decreasing services".
"The only way to do those things is to radically restructure the city and allow it to reinvent itself without the burden of impossible obligations.
"It is clear that the financial emergency in Detroit cannot be successfully addressed outside of such a filing, and it is the only reasonable alternative that is available".
Mr Orr has said that the city's long-term debt could actually be between $17bn and $20bn.
The former manufacturing powerhouse's finances have struggled for some time, driven by a number of factors, including a steep population loss.
The city government has also been hit by a string of corruption scandals over the years.
Declining investment in street lights and emergency services have made it difficult to police the city.
The city lost 250,000 residents between 2000-10.
http://www.bbc.co.uk/news/world-us-canada-23369573
It *should* lead to cutbacks in the size of government and too many workers taking too much in the way of benefits.
Which will happen right after I clear this pig for takeoff.
If you can, watch the documentary 'Detropia' which was on PBS earlier this year. Gives a very interesting look at the decline of Detroit and how some are trying to renew the city.
Unfortunately Detroit's situation reminds me of the 1987 movie 'Robocop' and OCP taking over the city.
It's sad how far Motor City / Motown has fallen.
Was just talking about this with The Wife...are there any Western European cities comparable to Detroit?
Also if you are really interested in what is going on in Detroit try the book Detroit: An American Autopsy by Charlie LeDuff. Good read.
Gus, that's a good question. Offhand maybe Essen in the Ruhr?
Thanks to the Kruppe dynasty, they were the steel and industrial city. In World War II, the plants were flattened, but the city has climbed back.
To those interested, Wikipedia has a good entry on the decline of Detroit: http://en.wikipedia.org/wiki/Decline_of_Detroit (http://en.wikipedia.org/wiki/Decline_of_Detroit)
Wonder if Detroit plans to default on outstanding municipal bonds?
Or are they expecting a bailout from Obama?
What's even more interesting is that there is a mayoral election in Detroit this year. The current mayor is not running. I think every candidate is promising to get rid of the emergency financial manager that the governor has appointed, even though they don't have the power to do it.
Quote from: eyebiter on July 18, 2013, 07:27:28 PM
Wonder if Detroit plans to default on outstanding municipal bonds?
Or are they expecting a bailout from Obama?
Yes and yes.
Quote from: eyebiter on July 18, 2013, 07:27:28 PM
Or are they expecting a bailout from Obama?
They've been expecting that since the Obama's reelection, and they haven't got anything yet.
Quote from: OJsDad on July 18, 2013, 08:52:00 PM
Quote from: eyebiter on July 18, 2013, 07:27:28 PM
Or are they expecting a bailout from Obama?
They've been expecting that since the Obama's reelection, and they haven't got anything yet.
Let them eat wait.
50 years ago Detroit's population was 2 million. Now it's around 700,000. The urban core is about 25% hollowed out and some lots are used for urban farming. The police and fire departments use equipment that is 40-50 years old and the downtown, while not totally empty, is struggling to attract both businesses and daytrippers.
Bes...so Essen is the Detroit if Europe eh? The Wife and I were trying to think of one European city we would like to go to less than Detroit. I came up with Minsk and Kiev (where my great grandparents are from) but even those places hold a certain amount of romance to them since I know less about them than Detroit.
pool our money and send in JH and Mike.
Quote from: GDS_Starfury on July 18, 2013, 09:18:57 PM
pool our money and send in JH and Mike.
Heck, any ten of us here could run that city better than it's been run in decades.
ya think that simcity hack would work?
The one where you autolevel the whole map, allowing you to collecting the sales value for everything eliminated and start over?
um... no.
but your Godzilla complex is noted.
note to self:
do not give Staggerwing the keys to the orbital strike ships.
Quote from: Staggerwing on July 18, 2013, 09:27:23 PM
The one where you autolevel the whole map, allowing you to collecting the sales value for everything eliminated and start over?
About six years ago, I spent a week in Pontiac visiting friends (who have since gotten smart and moved back to Texas), and I'm telling ya, Detroit already looked like it had been auto-leveled. I'm starting to wonder how they still have teams in all the major sports leagues.
Quote from: Steelgrave on July 18, 2013, 10:15:41 PM
I'm starting to wonder how they still have teams in all the major sports leagues.
I've been curious about that as well. My only real guess is that there are (somehow) still enough Michiganders with money to support them, and that they live outside the immediate urban core.
The suburbs is were all of the people have moved to, so there are still quite large fan base.
I've been to Detroit once, for a soccer tournament for my son.
It set low expecations going in, and managed to beat every one of them. Sort of like New Jersey.
New Jersey vs. Detroit...now there's a race to the bottom.
Quote from: Gusington on July 19, 2013, 08:51:33 AM
New Jersey vs. Detroit...now there's a race to the bottom.
QuoteVictor Melling: Why is New Jersey called "The Garden State"?
Gracie Hart: Because it's too hard to fit"Oil and Petrochemical Refinery State" on a license plate?
If the Federal Government bails out Detroit, this removes all incentive for other cities or states to maintain fiscal responsibility. If they know the Feds will step in clean up their mess, might as well spend it all. Uncle Sugar can just print up another trillion dollars to cover the cost.
This bodes ill for the municipal bond market. Traditionally this has been a haven for conservative investors. When cities get the idea they no longer have to pay their bills, funding future capital improvement projects will entail higher costs and greater risk for everyone.
We also cannot afford to bail out every bankrupt city. Period.
I doubt any bailout will be coming - at least while the GOP controls the House.
Detroit is a prime example of politicians burying their heads in the sand while the tides coming in. It's taken about 60 years to get to this point. Unfortunately, when the so called leadership is more interest in lining their own pockets and getting reelected, the truth gets lost.
Pretty much every other city in New York State besides NYC could probably file for.bankruptcy soon too.
Quote from: LongBlade on July 18, 2013, 08:54:33 PM
Let them eat wait.
Just the pretty ones please, with the big bazookas.
Well when you are a one party city/state these things happen. The question is how much longer until Chi town will fall?
Quote from: LongBlade on July 19, 2013, 09:26:42 AM
Quote from: Gusington on July 19, 2013, 08:51:33 AM
New Jersey vs. Detroit...now there's a race to the bottom.
QuoteVictor Melling: Why is New Jersey called "The Garden State"?
Gracie Hart: Because it's too hard to fit"Oil and Petrochemical Refinery State" on a license plate?
All of the above QFT.
Presumably, if they go bankrupt, they're no longer in any position to pay public service salaries, pensions etc. That will be a financial disaster for those individuals, but is also a disaster for the other residents re schools, police, public health etc. Very sad.
Quote from: eyebiter on July 19, 2013, 10:57:46 AM
If the Federal Government bails out Detroit, this removes all incentive for other cities or states to maintain fiscal responsibility. If they know the Feds will step in clean up their mess, might as well spend it all. Uncle Sugar can just print up another trillion dollars to cover the cost.
This bodes ill for the municipal bond market. Traditionally this has been a haven for conservative investors. When cities get the idea they no longer have to pay their bills, funding future capital improvement projects will entail higher costs and greater risk for everyone.
Agree.
That is the game of winning politics today by creating bills for someone else in the future.
There's a lot of talk right now on what happens to city workers' pensions. They aren't going away but they are being cut drastically.
But the state is going to help the Red Wings get their shiny new arena (http://news.nationalpost.com/2013/07/24/michigan-defends-284-million-fund-to-help-build-new-arena-for-red-wings-in-bankrupt-detroit/)...cause that will magically turn the entire economy around.
I love the part where they explain that much of the public investment will be paid back through increased tax revenue from the area around the arena.
What tax revenue? You have no economy!
Detroit makes me feel better about myself. "Well at least I aint that guy."
http://www.economist.com/news/leaders/21582258-it-not-just-detroit-american-cities-and-states-must-promise-less-or-face-disaster (http://www.economist.com/news/leaders/21582258-it-not-just-detroit-american-cities-and-states-must-promise-less-or-face-disaster)
Quote from: Mr. Bigglesworth on July 25, 2013, 09:35:07 PM
http://www.economist.com/news/leaders/21582258-it-not-just-detroit-american-cities-and-states-must-promise-less-or-face-disaster (http://www.economist.com/news/leaders/21582258-it-not-just-detroit-american-cities-and-states-must-promise-less-or-face-disaster)
In the US - if you've been paying attention - we've been told Detroit is the first of several big cities in trouble.
Here's the key - the city employees got greedy and tried to live too high off the hog. They're about to learn what happens when they ask for too much and fail to make hard choices, like hiking taxes, to pay for what they want.
From the article:
QuoteNearly half of Detroit's liabilities stem from promises of pensions and health care to its workers when they retire. American states and cities typically offer their employees defined-benefit pensions based on years of service and final salary. These are supposed to be covered by funds set aside for the purpose. By the states' own estimates, their pension pots are only 73% funded. That is bad enough, but nearly all states apply an optimistic discount rate to their obligations, making the liabilities seem smaller than they are. If a more sober one is applied, the true ratio is a terrifying 48% (see article). And many states are much worse. The hole in Illinois's pension pot is equivalent to 241% of its annual tax revenues: for Connecticut, the figure is 190%; for Kentucky, 141%; for New Jersey, 137%.
Quote"Can't solve the problems because the problems are cultural," Will said. "You have a city, 139 square miles. You can graze cattle in vast portions of it. Dangerous herds of feral dogs roam in there. You have 3 percent of fourth graders reading at the national math standards. Forty-seven percent of Detroit residents are functionally illiterate. Seventy-nine percent of Detroit children are born to unmarried mothers. They don't have a fiscal problem, Steve. They have a cultural collapse."
Read more: http://dailycaller.com/2013/07/28/george-will-detroit-doesnt-have-a-fiscal-problem-but-a-cultural-collapse/#ixzz2aRYBakrN
Thanks for the link, LB. I don't really agree -- there are simply too many factors involved in Detroit's decline/collapse for any one of them dominate -- but I'm willing to concede he may have a point.
Michigan should decriminalize weed, tax its sale and permit the legal establishment of weed bars/casinos. That'd turn the economy of Detroit around, and boost the enrollment of Michigan State U.
Quote from: Centurion40 on July 29, 2013, 11:44:19 AM
Michigan should decriminalize weed, tax its sale and permit the legal establishment of weed bars/casinos. That'd turn the economy of Detroit around, and boost the enrollment of Michigan State U.
They don't need more weed.
They need a population that understands how to build a family, stay married, and learn to read and write.
Detroit seems to be the poster child for corruption and dependence on government programs.
Americans in virtuous states and cities will be just as furious about their tax dollars flowing to Detroit and other distressed places as Germans are about euros going to southern Europe. But the truth is that America's whole public sector still operates in a financial never-never land. Uncle Sam offers an array of "entitlements" that there is no real plan to pay for. Barack Obama is on his way to joining George W. Bush as a president who did nothing about that, while Republicans in Congress imagine they can balance the books without raising taxes. The government spends more on health care than many rich countries and still does not cover everyone. America's dynamic private sector is carrying on its back an unreformed Leviathan. Detroit is merely a symptom of that.
Not a lot of factual information here... raises more questions than anything.....
whats a virtuous state? Whats a NOT virtuous state?
talk about a false dichotomy
Do you REALLY get influenced by this shit?
here I would take virtuous states and cities as those that have balanced budgets.
Quote from: GDS_Starfury on July 29, 2013, 12:10:54 PM
here I would take virtuous states and cities as those that have balanced budgets.
and you don't find that definition just a little disingenuous? Any state/city that builds infrastructure has debt.
Quote from: LongBlade on July 29, 2013, 11:54:13 AM
Quote from: Centurion40 on July 29, 2013, 11:44:19 AM
Michigan should decriminalize weed, tax its sale and permit the legal establishment of weed bars/casinos. That'd turn the economy of Detroit around, and boost the enrollment of Michigan State U.
They don't need more weed.
They need a population that understands how to build a family, stay married, and learn to read and write.
Detroit seems to be the poster child for corruption and dependence on government programs.
Seeing how re-education camps might not fly, how about encouraging the people to help themselves? The weed is not for the residents. It's for tourists who will come and drop their vacation spending dollars having a good time; like Vegas with less sand.
Quote from: GDS_Starfury on July 29, 2013, 12:10:54 PM
here I would take virtuous states and cities as those that have balanced budgets.
Maybe Michigan needs to get invaded by
the Americans Japanese/Germans and they can set the economy straight! Returning the favor after WWII?
And I've just punted this into R&P! :P
Quote from: Windigo on July 29, 2013, 11:56:53 AM
Americans in virtuous states and cities will be just as furious about their tax dollars flowing to Detroit and other distressed places as Germans are about euros going to southern Europe. But the truth is that America's whole public sector still operates in a financial never-never land. Uncle Sam offers an array of "entitlements" that there is no real plan to pay for. Barack Obama is on his way to joining George W. Bush as a president who did nothing about that, while Republicans in Congress imagine they can balance the books without raising taxes. The government spends more on health care than many rich countries and still does not cover everyone. America's dynamic private sector is carrying on its back an unreformed Leviathan. Detroit is merely a symptom of that.
Not a lot of factual information here... raises more questions than anything.....
whats a virtuous state? Whats a NOT virtuous state?
talk about a false dichotomy
Do you REALLY get influenced by this shit?
It's pretty clear what a lack of civic virtue produces, Windy.
giyf
While true, what (realistically) can be done about it??!!
actually its GIYFS.... not sure what yours means ;)
Quote from: Windigo on July 29, 2013, 12:17:20 PMand you don't find that definition just a little disingenuous? Any state/city that builds infrastructure has debt.
But there's a difference between bond-funded debt to raise money for a specific infrastructure project* and open-ended pension-based debt that underfunded based on life expectancy and retirement rates as well as the peculiarities of union labor contracts
Not all debt is created equal, and debt-with-no-repayment-plan-while-still-willfully-running-it-up is the worst kind of all
* let's sell bonds to build this bridge and pay back holders at 2.8% and we anticipate that taking 15 years, etc etc
Virtue (Latin: virtus, Ancient Greek: ἀρετή "arete") is moral excellence. A virtue is a positive trait or quality deemed to be morally good and thus is valued as a foundation of principle and good moral being. Personal virtues are characteristics valued as promoting collective and individual greatness. The opposite of virtue is vice.
After years working in welfare, I can tell you that it is human nature not to want to be poor. The trick is to motivate the poor to understand that they don't have to be poor, and then show them a way to be less poor and to cease being reliant on a hand-out.
It's a serious trick.
Quote from: bayonetbrant on July 29, 2013, 12:45:14 PM
Quote from: Windigo on July 29, 2013, 12:17:20 PMand you don't find that definition just a little disingenuous? Any state/city that builds infrastructure has debt.
But there's a difference between bond-funded debt to raise money for a specific infrastructure project* and open-ended pension-based debt that underfunded based on life expectancy and retirement rates as well as the peculiarities of union labor contracts
Not all debt is created equal, and debt-with-no-repayment-plan-while-still-willfully-running-it-up is the worst kind of all
* let's sell bonds to build this bridge and pay back holders at 2.8% and we anticipate that taking 15 years, etc etc
setting up a pension fund that is properly administered/reviewed is not a challenge on any tax payer - in this case I will bet dollars to doughnuts that the pension contributions went into general revenue funds and were never set aside 100%
^^ or were systematically under-collected with the expectation that some form of 'investment' would grow them over time.
I think the disconnect between Detroit (among others) and your post is
Quote from: Windigo on July 29, 2013, 12:52:47 PMthat is properly administered/reviewed
Quote from: Centurion40 on July 29, 2013, 12:46:50 PM
After years working in welfare, I can tell you that it is human nature not to want to be poor. The trick is to motivate the poor to understand that they don't have to be poor, and then show them a way to be less poor and to cease being reliant on a hand-out.
It's a serious trick.
you will always have my respect for working in the field you do 40Cent - for as long as you have.... the 1-5% that are bad apples would piss me off and I'd say something to them that'd get me put in the basement archieve room, sorting paper records, by hand, with the big fatty admin support, who did GDS, ... and remembers it.... LOL
Quote from: bayonetbrant on July 29, 2013, 12:54:36 PM
^^ or were systematically under-collected with the expectation that some form of 'investment' would grow them over time.
I think the disconnect between Detroit (among others) and your post is
Quote from: Windigo on July 29, 2013, 12:52:47 PMthat is properly administered/reviewed
they need actuary consultations on a regular basis .... a well run
defined benefit plan will increase employee contributions if the investment portion of the fund doesn't perform very well and/or the retired employees are living longer
Quote from: Windigo on July 29, 2013, 12:56:33 PM
Quote from: Centurion40 on July 29, 2013, 12:46:50 PM
After years working in welfare, I can tell you that it is human nature not to want to be poor. The trick is to motivate the poor to understand that they don't have to be poor, and then show them a way to be less poor and to cease being reliant on a hand-out.
It's a serious trick.
you will always have my respect for working in the field you do 40Cent - for as long as you have.... the 1-5% that are bad apples would piss me off and I'd say something to them that'd get me put in the basement archieve room, sorting paper records, by hand, with the big fatty admin support, who did GDS, ... and remembers it.... LOL
It's more than 1-5%. It can also be the case of the bad apples not knowing enough, or being too dysfunctional to get out of their own way.
Quote from: Windigo on July 29, 2013, 12:44:59 PM
actually its GIYFS.... not sure what yours means ;)
http://grogheads.com/forums/index.php?topic=6861.msg167055#msg167055 ;)
Quote from: Centurion40 on July 29, 2013, 12:46:50 PM
After years working in welfare, I can tell you that it is human nature not to want to be poor. The trick is to motivate the poor to understand that they don't have to be poor, and then show them a way to be less poor and to cease being reliant on a hand-out.
It's a serious trick.
Yup. Once you give someone money there is a zone around the cutoff area where they actually have a disincentive to work as taking an honest job may actually yield less income. At least in the short run. It gets even more vexing if you include benefits (like healthcare) in such an "anti-poverty" system.
I agree most folks don't want to be poor. In the States we have generational poverty. One mom passes the skills of living on welfare to the daughter. That's certainly not helping anyone.
It's worse when there's no father at home to work while the mom watches the kids. It's then worse when the kids are illiterate and start running with a bad crowd.
One thing is certain: what we have doesn't work.
Quote from: LongBlade on July 29, 2013, 02:19:16 PM
Quote from: Windigo on July 29, 2013, 12:44:59 PM
actually its GIYFS.... not sure what yours means ;)
http://grogheads.com/forums/index.php?topic=6861.msg167055#msg167055 ;)
Get It Your Frakkin' Self... akin to 'go google it yourself pussy!'
just the idea of Windy defining virtue is funny.
Quote from: GDS_Starfury on July 29, 2013, 02:35:13 PM
just the idea of Windy defining virtue is funny.
wikipedia did it for me.... just for me
(https://www.grogheads.com/forums/proxy.php?request=http%3A%2F%2Fwww.kidzcoolit.com%2Fwp-content%2Fuploads%2F2012%2F10%2Flittle-princess-2.jpg&hash=48343163216a9445f3c657d14f6e7509beb01ea1)
Quote from: Windigo on July 29, 2013, 02:34:28 PM
Quote from: LongBlade on July 29, 2013, 02:19:16 PM
Quote from: Windigo on July 29, 2013, 12:44:59 PM
actually its GIYFS.... not sure what yours means ;)
http://grogheads.com/forums/index.php?topic=6861.msg167055#msg167055 ;)
Get It Your Frakkin' Self... akin to 'go google it yourself pussy!'
The typo, boyo. It's yours :
QuoteQuote from: Windigo on July 27, 2013, 02:42:05 AM
Quote from: LongBlade on July 26, 2013, 08:32:30 PM
Interesting.
This line stood out to me:
QuoteCommunist leaders are trying to reduce reliance on investment and trade.
Why reduce their reliance on trade? Perhaps to reduce their reliance on the US. In which case they will more freely be able to move against our wishes if we aren't so intertwined economically.
My guess is they're going to lose that bet. They're trying to use command economy thought processes to create a free market. But the free market is already working there. Ergo they're breaking something that is working.
BTW, got a link to the original article?
GIYF
if I understand the background they are over producing/have large stockpiles and prices are getting too low for these commodities... ergo like a typical command economy, they unilaterally cut back ... they are acting like a cartel IMO
smh
As if Detroit didn't have enough problems...
QuoteTwo Detroit-area police officers were arrested this weekend in connection with a July 21 gas station robbery. The veteran cops, who have 37 years of experience between them, are suspected of robbing two 20-year-old men at a Detroit Citgo gas station.
The officers were off-duty at the time of the robbery, allegedly approaching the scene in a private vehicle and wearing their police badges. They are said to have stolen cash, a wallet and a cell phone.
Read more: http://dailycaller.com/2013/07/29/two-detroit-area-cops-suspects-in-gas-station-robbery/#ixzz2aThJqZ3t
I believe it is possible when they are charged. Police in plain clothes wearing their badge when doing a robbery... yeah right.
Poverty aint what it used to be either when those getting benefits have flat screen TVs and the newest Nike sneakers. Seeing crap like that really gets my goat.
Stealing from the State is the same as stealing from Walmart, to a criminal.
Quote from: Gusington on July 30, 2013, 07:17:19 AM
Poverty aint what it used to be either when those getting benefits have flat screen TVs and the newest Nike sneakers. Seeing crap like that really gets my goat.
Working at a church food bank this last weekend, taking boxes of food out to the cars....maybe a third of the folks were driving newer, more expensive cars than I own. It could be that misfortune hit and they are stuck with more car than they can afford, maybe they are one step ahead of the repo man. Hell, I don't know. But those folks left me feeling discouraged, while the folks who obviously needed the food, the folks who had a couple of kids in tow, the kids who were excited to see cookies go in the box, it was humbling and gratifying to just be a little help. I try hard not to judge either group, the folks with expensive cars who maybe fell on hard times, or the folks who had to catch a ride from a neighbor to come get food, because I don't know anyone's circumstances. But damn, it's hard not to wonder.
I do know that these last few years have seen the worst economy of my lifetime, something I never thought I would say after the Carter years. All the political preaching about expanding the middle class? Yeah, well come work a food bank, Mr. Politician, and not just for the photo op....you'll see how well that's working out.
Back when my oldest son was a self entitled teenager, I dragged his butt to a street church volunteer event. Putting together and filling small backpacks for use by street people. Just the basic hygiene stuff, socks, underwear, water bottle, some nutrition bars. When we started handing them out at the BBQ event for street people.... And they were talking to him.... DING DING DING. I saw some clue run accross his face and then grab him in the ass. One of my finer parenting moments.
^Indeed. Good job, Windy.
The other thing I'm seeing more and more of....at many intersections and highway exits, there will be a guy holding a sign asking for help. This isn't anything new, I sometimes saw the same thing in Houston 30 years ago. But there is more of it, and the "guys" are getting younger. And more often than before, you see the occasional woman as well. The guy with the artificial leg, I gave a few bucks to as I did the woman at the entrance to Walmart today who had a kid with her. I suspect a helluva lot of these people are scamming or can't find work because of substance abuse problems. But the guy with an artificial leg? Go blow it on wine or beer or blow, buddy, I don't care.
Quote from: Gusington on July 30, 2013, 07:17:19 AM
Poverty aint what it used to be either when those getting benefits have flat screen TVs and the newest Nike sneakers. Seeing crap like that really gets my goat.
In a time of high unemployment would you rather people on benefits had better lifestyles than before through the benefit system, or acquired such through the proceeds of crime as a lack of opportunity to improve lifestyle and the politics of envy kick in?
Not saying that I think it's good, but look at the alternative of not providing decent welfare in the face of serious unemployment.
So are you saying that the majority of people who are unemployed would resort to crime in order to live if they had no welfare benefits?
There's gotta be a balance and some kind of check on scamming.
The big thing in NYC in the last 15-20 years has been the young couple on the street with a dog to take care of too. Hits a lot of people, seeing a homeless hungry dog.
I think that says a lot.
When Katrina hit and the Feds started handing out 2k Visa cards with almost no oversight, there were a lot of abuses. A friend of mine worked at Best Buy and told of flat-screen TV's, DVD players and other electronics being bought with those cards. It pissed off a lot of the people working at his store, but there was nothing they could do and to management, a sale was a sale. At the same time, our church turned their school into housing and we housed and fed several hundred refugees from New Orleans, people who were genuinely in need. Other churches and charities in OKC did the same. Some folks are always going to hustle the system (cough***Obamaphones***cough). It's maddening and it hurts the people who really need the help, not to mention we taxpayers who are footing the bill. The political class could probably care less, prosecuting people who steal via government handouts is not a popular option nowdays.
I did come across a really good article on the Detroit situation and moreso, on our political situation as a whole. It makes some great points and is worth a read.
http://www.realclearpolicy.com/articles/2013/08/05/detroit_and_the_special-interest_state_597.html (http://www.realclearpolicy.com/articles/2013/08/05/detroit_and_the_special-interest_state_597.html)
This song from the group Texas is still pretty catchy: http://www.youtube.com/watch?v=jaqDQUmKop0 (http://www.youtube.com/watch?v=jaqDQUmKop0)
Quote from: Steelgrave on August 06, 2013, 01:12:44 PM
When Katrina hit and the Feds started handing out 2k Visa cards with almost no oversight, there were a lot of abuses. A friend of mine worked at Best Buy and told of flat-screen TV's, DVD players and other electronics being bought with those cards. It pissed off a lot of the people working at his store, but there was nothing they could do and to management, a sale was a sale. At the same time, our church turned their school into housing and we housed and fed several hundred refugees from New Orleans, people who were genuinely in need. Other churches and charities in OKC did the same. Some folks are always going to hustle the system (cough***Obamaphones***cough). It's maddening and it hurts the people who really need the help, not to mention we taxpayers who are footing the bill. The political class could probably care less, prosecuting people who steal via government handouts is not a popular option nowdays.
I did come across a really good article on the Detroit situation and moreso, on our political situation as a whole. It makes some great points and is worth a read.
http://www.realclearpolicy.com/articles/2013/08/05/detroit_and_the_special-interest_state_597.html (http://www.realclearpolicy.com/articles/2013/08/05/detroit_and_the_special-interest_state_597.html)
It seemed like a good article until this line
"Only the Koch Brothers hold to the ideal of the free market without cronyism, which is why they are so thoroughly excoriated by the Progressives."
at which point it became just another crony pointing fingers at everyone else.
Lets dispense with all the current political positions, relying on old words of wisdom:
Thomas Jefferson
1785 Aug. 23. (to John Jay) "Cultivators of the earth are the most valuable citizens. They are the most vigorous, the most independant, the most virtuous, and they are tied to their country and wedded to it's liberty and interests by the most lasting bands." [3] (http://www.monticello.org/site/jefferson/quotations-agriculture#_note-2)
1785 Oct. 28. (to James Madison (http://wiki.monticello.org/mediawiki/index.php/James_Madison)) "It is not too soon to provide by every possible means that as few as possible shall be without a little portion of land. The small landholders are the most precious part of a state."[4] (http://www.monticello.org/site/jefferson/quotations-agriculture#_note-3)
1787 Dec. 20. (to James Madison (http://wiki.monticello.org/mediawiki/index.php/James_Madison)) "I think our governments will remain virtuous for many centuries; as long as they are chiefly agricultural." [5] (http://www.monticello.org/site/jefferson/quotations-agriculture#_note-4)
So it has long been known what is required to keep the power plays at bay. Yet it is not followed.
^Unless of course you're Alexander Hamilton.
Them's fightin' words!
East Detroit was the city of my youth-I was born and raised there before my family fled to the suburb of Grosse Pointe Park after I turned 13.
I always have very fond visions of Detroit as I recall growing up there as a young boy.It was a vibrant town with an economy that was the envy of the world and also considered the richest city in the world with no equal anywhere as far as income per capita and public works.
I don't think I've ever seen more mansions anywhere else then I saw in the Detroit area and the great food and quality and quanity of the manufactured goods that were made in that city were also things that I miss and recall most while growing up there.
Detroit was a workers utopia.Where everything always seemed to get better from generation to generation and the future always looked bright.
What happened?
Detroit was a manufacturing town in a country that no longer wanted to pay its workers a living wage for manufactured goods and seeked cheap replicas from foreign industries as a substitute.It was also a town that eventually succumbed to greed and corruption and elected its officials not for vision or leadership quality,but people who made promises they never intended to keep while they raped the dying city of its last vistages of respect.Times changed and the leaders of Detroit didn't have the guts or vision or know how to change with it.
The poor didn't kill Detroit!They are the remnants of its self destructive and self imploding aftermath.
I thank god I left there as soon as I graduated high school and never went back to witness it agonize in its death throws,but there is still a place in my heart for a city that was once a great city and the envy of the world-Americana at its finest!
I doubt we will ever see another city like it,that offered so much hope and so much prosperity for a better future in a free land to so many ever again.
Quote from: Dolan50 on August 18, 2013, 08:47:20 PM
I thank god I left there as soon as I graduated high school and never went back to witness it agonize in its death throws,but there is still a place in my heart for a city that was once a great city and the envy of the world-Americana at its finest!
I doubt we will ever see another city like it,that offered so much hope and so much prosperity for a better future in a free land to so many ever again.
Envy of the World ?
really ?
Most of the World couldnt care less about Detroit, then and now
"Most of the World couldnt care less about Detroit, then and now"
Why do I get the impression you know very little or nothing about Detroit or its history?
I think if you ever studied the history of Detroit your comment would make about as much sense to you as it did to me.
Quote from: jejo68 on August 19, 2013, 12:18:09 AM
Quote from: Dolan50 on August 18, 2013, 08:47:20 PM
I thank god I left there as soon as I graduated high school and never went back to witness it agonize in its death throws,but there is still a place in my heart for a city that was once a great city and the envy of the world-Americana at its finest!
I doubt we will ever see another city like it,that offered so much hope and so much prosperity for a better future in a free land to so many ever again.
Envy of the World ?
really ?
Most of the World couldnt care less about Detroit, then and now
Detroit had many positive things going for it... including a vibrant culture... then politics happened
Detroit in 1950 was the manufacturing center of North America and the 4th largest US city. A lot of people cared about Detroit.
Somehow, something tells me that politics took place in Detroit prior to 1950. Call me crazy, but it's just a hunch.
Pretty good article on CNBC talking about the math of the bankruptcy. Be interesting how the judge rules. One thing is for certain, if the unions get their way, and they turn out to be wrong, they wont be the ones making up the shortfalls.
Quote
How broke is Detroit? It'll come down to number-crunching
BUSINESS NEWS
CNBC.com | Tuesday, 20 Aug 2013 | 10:57 AM ET
State and city officials trying fix Detroit's financial mess claim that bankruptcy court is the only option left to reverse a decades-long downward spiral.
A witches brew of opponents to the nation's largest-ever bankruptcy filing—including city unions, pension fund managers, bondholders, bond insurers, vendors, and a long list of other creditors—say the city can be saved without such extreme measures.
A court will decide who is right based on a parade of expert witnesses who will present conflicting accounts of the city's financial wreckage.
Nothing about this case is simple. With more than 100,000 creditors, multiple classes of bond holders and tens of thousands of current and future retirees owed billions in pension payments, the case is already shaping up as the most complex since Congress set up municipal bankruptcy rules more than 75 years ago.
One of the most contentious questions rests on the arcane art of actuarial analysis: the mix of math and forecasting assumptions used to determine how much the city needs to set aside today to meet its obligations to retirees decades in the future.
The city says the current collection of pension funds is some $3.5 billion short of the mark; city unions and other skeptics say the city has badly overstated what it needs to make good on promised retirement benefits.
Those estimates rely on a series of assumptions about how big those payments will be years in the future, along with the investment return of the money set aside to fund those payments. Tweaking those assumptions by a fraction of a percentage point today can change future projections by hundreds of billions of dollars.
That's why the legal case for Detroit's insolvency will likely rest on a series of expert witnesses both sides will call to crunch the numbers for the court—even if no one can establish with certainty whether the city's dire financial projections would come to pass without big debt write-downs.
"The city doesn't have to show that there aren't other arguments, just that its assumptions are reasonable," said Andrew Gottfried, a bankruptcy lawyer with Morgan Lewis. "That's what judges do all the time in bankruptcy; they have to value future income. It's a common exercise."
There will be no shortage of arguments when Judge Steven Rhodes, who is hearing the case, gavels the opening of the trial on October 23. Those trying to block the city from moving forward had until midnight Monday to file their objections.
(Read more: Pandemic of pension woes is plaguing the nation)
Detroit's unions were among them, arguing in several filings that the city has not proven it is insolvent and has not negotiated in good faith with its creditors. The unions also claim the filing violates the state constitution because the law protects retirement benefits for public workers and that it violates the U.S. Constitution by encroaching on states' rights.
Under the rules for a Chapter 9 municipal bankruptcy, the city must first show that it tried to work out a repayment plan with creditors before going to court. To demonstrate that good faith effort, Detroit's emergency manager, Kevyn Orr, will likely point to weeks of talks with creditors earlier this year which yielded settlements with just a handful of bondholders.
Orr will also have to show whether the city can pay its bills, or whether it is so broke that it cannot do that if the court does not help to renegotiate the terms.
The burden of proof for Orr is large. Since 1954, there have been 62 filings for Chapter 9; about half of them have been thrown out of court or settled.
By one measure—the annual flow of cash in and out of city hall—the case for insolvency is pretty easy to make. Since 2004, the city has run deficits of between $155 million and $326 million (last year's gap)—borrowing each year to make up the shortfall, according to a review in February by the Michigan Treasurer's office.
The borrowing spree to cover those deficits added nearly $1 billion to the city's debt. It also cost the city its good credit rating, which made it progressively more expensive to keep borrowing, according to Katilyn Pulcher, a credit analyst with Standard & Poor's.
"Now they've gotten to the point where they can't even afford to borrow because the interest cost would be too high," she said.
Other Detroit watchers argue that the city's debt burden wasn't necessarily unsustainable. Richard Larkin, a credit analyst with investment advisor Herbert J. Sims, noted in a recent analysis that the city pays off its debt faster than most, which could give it more breathing room if it restructured those payments.
"Just like you refinance your mortgage, they could refinance it to stretch out the debt—that could save them $257 million over 10 years," he said.
Opponents of the bankruptcy filing also argue that Detroit isn't trying hard enough to collect the money it needs to pay its bills.
(Read more: It's feds vs. state as Detroit heads to bankruptcy hearing)
No one disputes that city tax revenues have been falling for years, down 30 percent in the last decade alone, largely because the population has been shrinking. Once the nation's fifth-largest city, more than 60 percent of its residents have fled since the population peaked in 1950. In the past decade, that count shrank by a quarter.
But an analysis of city tax records in February by the Detroit News found that nearly half of the city's 305,000 property owners failed to pay taxes last year, leaving some $246 million uncollected.
Some of those properties were abandoned by mortgage lenders that foreclosed on houses and then walked away before taking ownership and before assuming responsibility for paying taxes. In 2010, the Government Accountability Office found that Detroit was among the cities hit hardest by the practice.
But homeowners owe much of the unpaid taxes, which fund services they are no longer getting. In any case, the city's dismal track record in collecting revenues does little to bolster the argument against letting the city proceed with its Chapter 9 filing, according to Gottfried.
"To say they should have been more aggressive in collecting taxes doesn't eliminate the problem," he said. "Virtually every debtor who comes into bankruptcy court could have done things better in the past. That's why we're here."
Bankruptcy opponents also point to other sources of cash the city could raise to pay its bills.
Detroit's district court, for example, is owed some $280 million in unpaid fines and other payments on everything from parking tickets to drunk driving violations, according to the Treasurer's financial review. While the average collection rate for courts in nearby counties is 60 percent, Detroit is collecting just under 8 percent, the report found.
(Read more: Detroit's bankruptcy battle likely to be long and painful)
Then there are assets the city could sell—everything from Belle Isle, a 985-acre, city-owned island park; to Detroit Institute of Art masterworks that include Van Gogh, Bruegel and Wyeth; and the original Howdy Doody marionette said to be worth $1 million.
Skeptics of such sales argue that relying on one-time asset sales to satisfy an accumulated $18 billion debt is a little like trying to pay the rent with nickels found under the couch cushions.
"A lot of the assets that Detroit has to sell are not liquid assets," said S&P's Pulcher. "It's not cash sitting around in the bank."
—By CNBC's John W. Schoen. Follow him on Twitter @johnwschoen.
© 2013 CNBC.com
URL: http://www.cnbc.com/100972931