Detroit files for bankruptcy

[Alan C.]

Detroit files for bankruptcy, stage set for court fight

 

...to tackle the city's spiraling long term debt, which is estimated at $18.5 billion.

 

. . .

 

Now the city's name has become synonymous with decline, decay and crime. Detroit has seen its population fall to 700,000 from a peak of 1.8 million people in 1950. The city's government has been beset by corruption cases over the years. Waning investment in street lights and emergency services has left it struggling to police the streets.

 

The city's murder rate is at its highest in nearly 40 years; only a third of its ambulances were in service in the first quarter of 2013; and its nearly 78,000 abandoned buildings create "additional public safety problems and reduces the quality of life in the city," the governor noted in his letter.

 

In June, Orr presented a proposal to creditors offering them pennies on the dollar. His plan had met with resistance from some creditors, most notably Detroit's two pension funds representing retired city workers. The funds recently filed lawsuits in a state court challenging the governor's ability to authorize Orr to file for bankruptcy.

 

Creditors are expected to mount a stiff challenge to the bankruptcy, which was filed in the U.S. Bankruptcy Court in the Eastern District of Michigan.

 

Douglas Bernstein, a bankruptcy attorney at Plunkett Cooney in the Detroit suburb of Bloomfield Hills, said he expected the case would last one-to-three years and would be very costly.

 

"This could run to tens-of-millions to hundreds-of-millions of dollars," he said.

 

Cue toilet flushing sound.

[Guest NateC]

http://www.policymic.com/articles/44725/this-is-what-budget-cuts-have-done-to-detroit-and-it-s-freaking-awesome

 

Leaving aside the details on whether the U.S. budget is actually shrinking, one needs to look no further than the city of Detroit to find the spontaneous order, civic cooperation, and peaceful market forces that take over when government simply isn't around.

 

From the ashes...

[vze57564]

Detroit was a ponzi scheme.  I thought it was illustrative of the deal when authorities use their power to extract value from others (bondholders, workers) with promises they can wriggle out of at a later date.  As it so happened, they could no longer kick cylindrical objects down the road anymore.  Reality hit them square in the face.  Personally, I think this is the way it will go for many other cities, states and perhaps countries in this Keynesian farce our leaders see fit to move us in.  As we can see in Detroit, either we come to our senses voluntarily or we have it shoved upon us in a bad way.  

[Alan C.]

After Detroit bankruptcy filing, city retirees on edge as they face pension cuts
 

Of Detroit’s overall debt, about half — $9.2 billion — represents pension and health benefits that the city has promised retirees but that it now says it does not have enough money to fully pay. The lion’s share of the remaining debt is owed to bondholders.

. . .

“I feel very vulnerable. I don’t feel we have any protection,” said Harper, 61, who receives $2,100 a month in pension payments. “I thought that at 30 years, you earned a pension that was accrued and you did not have to have a concern about that.”

 

Detroit not alone under mountain of long-term debt

 

The Pew Center for the States, in Washington, estimated states’ public pension plans across the U.S. were underfunded by a whopping $1.4 trillion in 2010.

 

25 Facts About The Fall Of Detroit That Will Leave You Shaking Your Head

 

50 years of parasitism and central-planning.

[Alan C.]

New $444 million hockey arena is still a go in Detroit

 

The arena will be paid for with a $450 million bond issue that will be repaid over the next 30 years. Taxpayers will be paying almost two-thirds of the cost of the arena -- $283 million -- and private developers will cover the rest. Including interest, it's projected that there will be a total of $444 million in taxpayer funds spent on the project.

[Alan C.]

20 Cities That May Face Bankruptcy After Detroit 

...many of the 61 largest U.S. cities are plagued with the same kinds of retirement legacy costs that sent Detroit into Chapter 9 bankruptcy this summer.These cities have amassed $118 billion in unfunded healthcare liabilities.