Detroit becomes Largest City in US History to File Bankruptcy

Off Topic Politics & World Issues
61

[quote]SkyzykS wrote:

[quote]beachguy498 wrote:
Detroit made one thing for 60+ years and did it well. The trickle-down employment kept everyone working even in unskilled jobs. Decimate the car industry and what do they have left? Not much.

For it to happen elsewhere is pretty remote unless something global hits the fan in the meantime.

Rob[/quote]

Same thing happened in Pittsburgh with steel when I was a kid.

Not sure of the political wrangling or whether or not the city declared bankruptcy though.
[/quote]

http://www.post-gazette.com/stories/business/news/in-desperate-1983-there-was-nowhere-for-pittsburghs-economy-to-go-but-up-667537/

62

[quote]beachguy498 wrote:

[quote]MaximusB wrote:
The Democratic way, promise the world, just don’t ask us how to pay for it. [/quote]

Easy to do with someone else’s money… the true democratic-liberal way. I do smell a bailout though. There have been auto-industry bailouts in the past in Detroit, but nothing on a whole city scale.

Rob[/quote]

How do you bail out a city though? I mean a company can turn around if the right moves are made.

How do you turn around an entire city?

63

[quote]dmaddox wrote:

[quote]atypical1 wrote:
I don’t think it’s fair to simply blame the pensions. Detroit spent decades rolling out crap products that didn’t sell. The role of the corporation and the management team is to help create a product that would sell. They totally failed at that bit. Additionally it’s their job to figure out how to become profitable and how to maintain that profitability despite high labor costs. They should have figured out their labor issues decades ago. If they couldn’t work compatibly with them then they should have moved to Kentucky or Texas long ago and forced the hand of the union leadership to play nicely.

But that’s all shoulda and coulda at this point.

james[/quote]

I agree with the crap product.

The pensions were underfunded and the city took out like $8-9 billion in bonds to try and catch them up. They are still underfunded and there is no end in site. Pensions was a large amount, but there are a lot of things going on that has brought this to a head, and it is about to pop.

These pensions are not Auto Corporation related. They are for City workers.
[/quote]

Detroit once had a big infrastructure that supported industry, so I can see the heavy city pension loads that are hanging around their necks. The autoworker’s pensions came out of their own unions.

It would be nice to entice big business to set up shop again, but the place may be a tad too far gone. It would take an enormous influx of cash to make it an attractive place to work and live, also face it. The winters suck in Detroit.

Rob

64

[quote]Testy1 wrote:

That is pure speculation about the pension dollars leaving. Detroit hasn’t shrunk much in recent years, the flight has happened gradually over decades.

I agree that is a big part of the burden, and pensions are going away. However, do you believe it is fair to tell someone “if you work for such and such amount, you will make this much to live on after retirement” then renege on that promise?

As far as this investment you are talking about do you mean military bases? That is just another form of entitlement. How is Texas handling their money better just because they can keep bases open and Michigan can’t?[/quote]

How is it Speculation? The population has decreased from 2 million to 600,000 citizens in the city. Probability shows a lot of it is moving away.

I agree if you make a promise you need to pay it, but HOW is it going to get paid if the money is not there?

Military Bases are not an investment. I am talking about investments into corporations. Giving them tax breaks or incentives to move their manufacturing plants to Texas. Texas and Conservatives know that if you give a corporation a tax break they will spend more money in a given location. They will expand a plant and hire more people. When you hire more people more income is taxed. Texas does not have an income tax but a sales tax. When there is more money in the hands of the people that earned it they have a choice whether to spend the money or save the money. I am all for saving money, but I still spend on big ticket items with cash. If there is more money to spend then more goods are purchased (sales tax receipts goes up) and now more jobs can be created because there is more money coming back to the company. This is Econ 101, and when you place the Government in the place of Companies it screws up the whole machine. Capitalism increases the PIE for everyone. Government keeps the PIE the same size and over a period of time starts to decrease the PIE because productivity goes down.

65

[quote]beachguy498 wrote:

[quote]dmaddox wrote:

[quote]atypical1 wrote:
I don’t think it’s fair to simply blame the pensions. Detroit spent decades rolling out crap products that didn’t sell. The role of the corporation and the management team is to help create a product that would sell. They totally failed at that bit. Additionally it’s their job to figure out how to become profitable and how to maintain that profitability despite high labor costs. They should have figured out their labor issues decades ago. If they couldn’t work compatibly with them then they should have moved to Kentucky or Texas long ago and forced the hand of the union leadership to play nicely.

But that’s all shoulda and coulda at this point.

james[/quote]

I agree with the crap product.

The pensions were underfunded and the city took out like $8-9 billion in bonds to try and catch them up. They are still underfunded and there is no end in site. Pensions was a large amount, but there are a lot of things going on that has brought this to a head, and it is about to pop.

These pensions are not Auto Corporation related. They are for City workers.
[/quote]

Detroit once had a big infrastructure that supported industry, so I can see the heavy city pension loads that are hanging around their necks. The autoworker’s pensions came out of their own unions.

It would be nice to entice big business to set up shop again, but the place may be a tad too far gone. It would take an enormous influx of cash to make it an attractive place to work and live, also face it. The winters suck in Detroit.

Rob[/quote]

It could happen. I have faith in America and its people, but the Government (city, county, state, and Federal) has to get out of the way. Lower taxes, lower regulations, and get the Unions out of there. GM, Chrysler, Ford, Hyundai, Honda, BWM, and some others have moved their factories to the south because they have low taxes, low regulations, and a right to work environment.

66

[quote]pittbulll wrote:

[quote]SkyzykS wrote:

[quote]beachguy498 wrote:
Detroit made one thing for 60+ years and did it well. The trickle-down employment kept everyone working even in unskilled jobs. Decimate the car industry and what do they have left? Not much.

For it to happen elsewhere is pretty remote unless something global hits the fan in the meantime.

Rob[/quote]

Same thing happened in Pittsburgh with steel when I was a kid.

Not sure of the political wrangling or whether or not the city declared bankruptcy though.
[/quote]

http://www.post-gazette.com/stories/business/news/in-desperate-1983-there-was-nowhere-for-pittsburghs-economy-to-go-but-up-667537/
[/quote]

That was a good read. Thanks. I remember watching it on the news as thousands of layoffs were announced, closings, strikes, and fights were breaking out like crazy.

It was hard to comprehend at the time.

67

Hey, leave Pittsburgh out of this :P.

Maddox, you may have faith in the people, but unfortunately I do not. Too many are willingly accepting the aid being handed to them, free phones, etc. How do you break a spoiled child? You take away that which spoiled them. In this case, can you imagine the ramifications? All across the country the poor are no longer being subsidized to be poor. Crime rates would shoot through the roof and utter chaos. We don’t have the military or police power to control that kind of mayhem. We can slowly taper it down, but that assumes people will realize it and slowly get back on their feet.

We’re down a rabbit hole and it continues to get smaller and smaller, and now we realize we forgot to bring the grease to slip through.

68

[quote]MaximusB wrote:

[quote]Quasi-Tech wrote:
As much as I hate to say it, blue collared jobs are going the way of the dodo, and that - aside from people’s seeming eagerness to just hop on welfare - is a big part of the problem.

I’m not talking skilled trade blue collar jobs, like brick layers, carpenters, etc., I’m referring to other blue collar jobs, manual labor that doesn’t require training. Its just a matter of time before robots are taking over all simple work. Hell, even in welding - which is a skilled labor job/art - they now have robots that do it just as well.

People are falling behind the times, there are no longer as many options out there. Either work part time, remedial, go into a skilled trade, military, or go white collar. Many of the degrees you get in college are absolutely worthless (liberal arts) unless you want to go masters/doctorate and intend to teach, and even then you’re at risk.

Its too easy to find people who can work for cheaper, and the US doesn’t produce much anymore (except grain) its all international. I’d expect it to get worse once Africa has been brought into the equation and IF the US can get on their good side, all raw materials will be coming from there and it will be turned into the next refinery/industrial location.

I second California going out, or a giant earthquake separating it from the country and letting it sink into the ocean. Save the few important folks (like Arnold) let the rest go down with it :P.[/quote]

Well I guess I’ll just swim the fuck outta here Quasi, good lookin’ out for a brother :)[/quote]

I would actively try to move to Arizona or Texas. If you can jump on a job-transfer (fully paid?) or something. I know you love Cali, but eventually costs go over revenue and you go in debt.

69

[quote]Testy1 wrote:

[quote]dmaddox wrote:

[quote]Aragorn wrote:

[quote]beachguy498 wrote:
Detroit made one thing for 60+ years and did it well. The trickle-down employment kept everyone working even in unskilled jobs. Decimate the car industry and what do they have left? Not much.

For it to happen elsewhere is pretty remote unless something global hits the fan in the meantime.

Rob[/quote]

First part I completely agree with you. second part…I dunno. yes and no I suppose. the same kind of thing that happened in detroit? not likely. butbbankruptcy? completely–just look at all the cities in California on the verge or already under. it will most likely vary by state of.course[/quote]

I dont think by state, but by city that has a liberal ideology. Blue Cities will be first.[/quote]

It is funny that you blame it all on democratic governments yet the largest recipients of government dollars are the fiscally “fit” red states. Maybe the blue states would be in better shape if they got back more than they put in like Texas.

Detroit certainly is in trouble but they would be in much better shape if they didn’t have huge holes blown in their budget by Snyder.
[/quote]

Got a source?

70

[quote]Testy1 wrote:

[quote]dmaddox wrote:

[quote]Testy1 wrote:

[quote]dmaddox wrote:

[quote]Aragorn wrote:

[quote]beachguy498 wrote:
Detroit made one thing for 60+ years and did it well. The trickle-down employment kept everyone working even in unskilled jobs. Decimate the car industry and what do they have left? Not much.

For it to happen elsewhere is pretty remote unless something global hits the fan in the meantime.

Rob[/quote]

First part I completely agree with you. second part…I dunno. yes and no I suppose. the same kind of thing that happened in detroit? not likely. butbbankruptcy? completely–just look at all the cities in California on the verge or already under. it will most likely vary by state of.course[/quote]

I dont think by state, but by city that has a liberal ideology. Blue Cities will be first.[/quote]

It is funny that you blame it all on democratic governments yet the largest recipients of government dollars are the fiscally “fit” red states. Maybe the blue states would be in better shape if they got back more than they put in like Texas.

Detroit certainly is in trouble but they would be in much better shape if they didn’t have huge holes blown in their budget by Snyder.
[/quote]

It is not the government that keeps a city or state solvent. It is the people and industry that keeps the state and local economies afloat. Texas’ economy produceses a lot more money than what our taxes paid do. We use the money given to us (mostly because of the military bases) to shore up the economy and not entitlements. The economy produces jobs, money, tax revenues, and other benefits. Entitlements are a sunk cost.[/quote]

First off that is pretty presumptuous to think all the tax dollars returned to Michigan are for entitlements. Second a dollar spent on a military base does not produce any more than a dollar that goes into a welfare recipients pocket. They both are pretty much immediately returned into the economy. Do you think welfare recipients are hoarding their checks and food stamps?

[/quote]

No, but military are more likely to save, thus invest, thus put money into the economy to produce rather than consume.

71

[quote]Testy1 wrote:
I agree that is a big part of the burden, and pensions are going away. However, do you believe it is fair to tell someone “if you work for such and such amount, you will make this much to live on after retirement” then renege on that promise?[/quote]

Give me 15% of your check and I’ll pay your full salary forever until you die, plus benefits. You agree, I should follow through, but that doesn’t mean I should have made the promise in the first place or that the arrangement will work.

Pensions are for suckers, just give me my check and I’ll take care of my retirement.

72

Brother Chris has good input Varq. I have no idea your political stance and am still trying to “figure you out” fully, but a number of people that are not too thrilled with California and have since moved on another forum I visit, have landed in the two states that were mentioned.

It’s tough to move but depending on your desire to do so, might be a good idea, even if it takes time to get started. It’s funny how some of the states around California (or Commiefornia as this other forums calls it, not me) are very different in their views. By the way, did you hear about the 10k or so guns they confiscated from people that were legally owned?

73

[quote]Quasi-Tech wrote:
Brother Chris has good input Varq. I have no idea your political stance and am still trying to “figure you out” fully, but a number of people that are not too thrilled with California and have since moved on another forum I visit, have landed in the two states that were mentioned.

It’s tough to move but depending on your desire to do so, might be a good idea, even if it takes time to get started. It’s funny how some of the states around California (or Commiefornia as this other forums calls it, not me) are very different in their views. By the way, did you hear about the 10k or so guns they confiscated from people that were legally owned?[/quote]

I’m in Missouri right now, it’s actually good for what I do because there are a lot of fallen away Catholics that come to my school from St. Louis (read: over-saturated Catholicville). I live in a predominately Catholic town right at the top of the Bible Belt. So, a lot of evangelicals in surrounding towns and even in town.

Evangelicals tend to be liberal in this town, Catholics come in two varieties (obviously this is a gen.). German/Dutch Farmer and St. Louis Liberal. So, if you spend a lot of time on campus, you’d think the town is somewhat liberal, if you hang out with townies, conservative.

I get along pretty good politically with everyone, except for the lower-income folks, but they are still generally nice people even if they have a high crime rate. Taxes aren’t too high and cost of living is pretty low.

But, going from Cali to Arizona would drop costs about 20 percent, I think you’d make up even more with the reduced taxes as well. Go to Texas and you drop even more. 26.4% drop.

74

[quote]Brother Chris wrote:

[quote]Testy1 wrote:
I agree that is a big part of the burden, and pensions are going away. However, do you believe it is fair to tell someone “if you work for such and such amount, you will make this much to live on after retirement” then renege on that promise?[/quote]

Give me 15% of your check and I’ll pay your full salary forever until you die, plus benefits. You agree, I should follow through, but that doesn’t mean I should have made the promise in the first place or that the arrangement will work.

Pensions are for suckers, just give me my check and I’ll take care of my retirement.[/quote]

The problem is there are guys that put in 30+ years (use the firefighter example), been retired an pushing 80. Now your going to say too bad go find a job? Promises were made, these guys didn’t pay into SSI, have failing health.

Many departments have made changes, my pension more closely resembles a 401k.

75

[quote]lanchefan1 wrote:

[quote]Brother Chris wrote:

[quote]Testy1 wrote:
I agree that is a big part of the burden, and pensions are going away. However, do you believe it is fair to tell someone “if you work for such and such amount, you will make this much to live on after retirement” then renege on that promise?[/quote]

Give me 15% of your check and I’ll pay your full salary forever until you die, plus benefits. You agree, I should follow through, but that doesn’t mean I should have made the promise in the first place or that the arrangement will work.

Pensions are for suckers, just give me my check and I’ll take care of my retirement.[/quote]

The problem is there are guys that put in 30+ years (use the firefighter example), been retired an pushing 80. Now your going to say too bad go find a job? Promises were made, these guys didn’t pay into SSI, have failing health.

Many departments have made changes, my pension more closely resembles a 401k.[/quote]

Yeah, it sucks. But you can’t give someone money when there is no money.

76

Like Social Security?

Here’s a fun thought. If banks were to close their doors tomorrow because they went bankrupt (like Cyprus did), what do you think would happen to all of the money in those electronic accounts? How would a bank repay you for that money that disappeared in the instant those servers got shut down? Do you really think some bank out there is holding the sum of all invested accounts, plus collateral against all of the loans and debt that exist?

How about that our government keeps printing money yet there is no verifiable proof there is gold to back it? There is only a certain amount of gold that exists on this planet and that is capable of being mined each year. At the rate to which the US government alone has printed funds, do you truly believe they are stocking shelves with gold bullion to “back” that money?

If the entire world’s currencies use gold as backing, and the USD - which is currently the worldwide trading medium stops holding validity in the world market, what do you think happens to all of those imports that our country depends on? Aside from grain, our largest export, we are heavily an import nation.

There is a reason some people are uncomfortable with the electronic world. There is no backing like is promised, and there is no security in banks that can close tomorrow. The owners will be long gone before the customer has a chance to demand refund of their money.

77

[quote]Quasi-Tech wrote:
Like Social Security?

Here’s a fun thought. If banks were to close their doors tomorrow because they went bankrupt (like Cyprus did), what do you think would happen to all of the money in those electronic accounts? How would a bank repay you for that money that disappeared in the instant those servers got shut down? Do you really think some bank out there is holding the sum of all invested accounts, plus collateral against all of the loans and debt that exist?

How about that our government keeps printing money yet there is no verifiable proof there is gold to back it? There is only a certain amount of gold that exists on this planet and that is capable of being mined each year. At the rate to which the US government alone has printed funds, do you truly believe they are stocking shelves with gold bullion to “back” that money?

If the entire world’s currencies use gold as backing, and the USD - which is currently the worldwide trading medium stops holding validity in the world market, what do you think happens to all of those imports that our country depends on? Aside from grain, our largest export, we are heavily an import nation.

There is a reason some people are uncomfortable with the electronic world. There is no backing like is promised, and there is no security in banks that can close tomorrow. The owners will be long gone before the customer has a chance to demand refund of their money.
[/quote]

Government doesn’t claim it backs the dollar with gold. Hasn’t since 74 when we went off the gold standard. The currency is backed by the government. The government binds us to use U.S. legal tender in transactions.

78

How does that change if the rest of the world goes to a gold-backed currency? China and Russia are buying up precious metals for some purpose, and doing deals on the side without using the USD. I posted a thread about this topic, though I’m derailing this one as a result.

I guess what I’m trying to get across, is the government can have lots of great ideas, but it doesn’t mean jack if they can’t pay for it. And the money doesn’t mean jack if it doesn’t represent something of value - whatever that may be.

79

[quote]lanchefan1 wrote:

[quote]Brother Chris wrote:

[quote]Testy1 wrote:
I agree that is a big part of the burden, and pensions are going away. However, do you believe it is fair to tell someone “if you work for such and such amount, you will make this much to live on after retirement” then renege on that promise?[/quote]

Give me 15% of your check and I’ll pay your full salary forever until you die, plus benefits. You agree, I should follow through, but that doesn’t mean I should have made the promise in the first place or that the arrangement will work.

Pensions are for suckers, just give me my check and I’ll take care of my retirement.[/quote]

The problem is there are guys that put in 30+ years (use the firefighter example), been retired an pushing 80. Now your going to say too bad go find a job? Promises were made, these guys didn’t pay into SSI, have failing health.

Many departments have made changes, my pension more closely resembles a 401k.[/quote]

Traditional pensions are on their way out. I’m fortunate to have 2, one is pretty good if I ever get to collect on it. My dad collected $1500 a month from Grumman, about 7 years ago they busted them all down by $100 a month. So there is no lock on pulling the full amount forever.

I jumped on a 401K offer 30 years ago and it has done well with all the ups & downs along the way. I was one of the owners of an ESOP company and after it sold, they cashed us in. So I’m one of the few that should retire very well. But the closer I get, the less confidence I have in our economy. I see enough people that are well over 70 that are still working for a living. If all you have is SSI, better move out of the US.

Rob

80

[quote]dmaddox wrote:

[quote]Testy1 wrote:

That is pure speculation about the pension dollars leaving. Detroit hasn’t shrunk much in recent years, the flight has happened gradually over decades.

I agree that is a big part of the burden, and pensions are going away. However, do you believe it is fair to tell someone “if you work for such and such amount, you will make this much to live on after retirement” then renege on that promise?

As far as this investment you are talking about do you mean military bases? That is just another form of entitlement. How is Texas handling their money better just because they can keep bases open and Michigan can’t?[/quote]

How is it Speculation? The population has decreased from 2 million to 600,000 citizens in the city. Probability shows a lot of it is moving away.

I agree if you make a promise you need to pay it, but HOW is it going to get paid if the money is not there?

Military Bases are not an investment. I am talking about investments into corporations. Giving them tax breaks or incentives to move their manufacturing plants to Texas. Texas and Conservatives know that if you give a corporation a tax break they will spend more money in a given location. They will expand a plant and hire more people. When you hire more people more income is taxed. Texas does not have an income tax but a sales tax. When there is more money in the hands of the people that earned it they have a choice whether to spend the money or save the money. I am all for saving money, but I still spend on big ticket items with cash. If there is more money to spend then more goods are purchased (sales tax receipts goes up) and now more jobs can be created because there is more money coming back to the company. This is Econ 101, and when you place the Government in the place of Companies it screws up the whole machine. Capitalism increases the PIE for everyone. Government keeps the PIE the same size and over a period of time starts to decrease the PIE because productivity goes down.
[/quote]

It went from 1.8 mil to 700K over FIFTY years. The recent flight has slowed waaaaay down. It has been a 700K for the last decade.

Do you really think Detroit hasn’t done the same thing with tax breaks for corporations?