Detroit is Eligible for Bankruptcy

by Ryan on December 3, 2013

in Economy,Politics,Stupid government

A judge ruled today that Detroit can file for bankruptcy to deal with its enormous fiscal woes.  A Chapter 9 bankruptcy gives some protection from a city’s creditors by renegotiating the plan to pay back that debt… debt which currently hovers around $18 billion owed to over 100,000 creditors!

Part of the city’s obligations are the pension it promised to its public workers in the past.  Should Detroit follow through and become the largest US city to ever file for bankruptcy, the public pensions will be put on the table for renegotiation as well. There is a $3.5 billion pension shortfall for the 23,000 retirees and 9,000 current employees.

This issue, the “human dimension,” will loom large.  At the end of the day a city’s economic survival ultimately means more than one silver-lined interest group.  Math is cold and tough to ignore forever.

So, this could turn out ugly — the former and current employees worked and made financial decisions based on the idea that they would have a certain pension on which to retire.  Both the unions and the politicians saw mutual benefit in promising more than the city could ultimately afford and ended up screwing the very people they were trying to hook up.

Liberalism eats its children once again.

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