Detroit’s bankruptcy bothers me although I knew it was going to happen. Financial failure is part and participial to the invasion and war within Illusions. A Republic Lost.
When educated and responsible people begin their married and familial lives, they know and understand that you cannot spend more than you make. You must keep your debt within managerial limits or nonexistent, and safe for the future.
We middle class know if you don’t pay the electric bill your electricity will be cut off. If you default on your mortgage you will eventually lose your home.
Now can anyone explain to me why some cities do not understand this?
Detroit has $18.25 billion of debt half which calculates to $26,838 per person living in Detroit. This amount is unsupportable.
When GM declared bankruptcy in 2009 it had been losing money for years in unfunded liabilities, the largest of which being pensions. Half of Detroit’s debt represents the unfunded retirement benefit program for state and local government employees. Note the word unfunded.
There never was enough money to support the pension programs that Detroit retirees may lose.
This is irresponsible financial responsibility. If you have a checkbook you know how it works.
- The Detroit Dilemma (webnerhouse.com)
- Moody’s Downgrades Chicago Debt Citing $19 billion in Unfunded Pension Liability; Avalanche of City Downgrades Coming Up (globaleconomicanalysis.blogspot.com)
- Retirees in Bankrupt Detroit Told They Will Have to Make Concessions (cnsnews.com)
- Detroit Bankruptcy and Crushing “Realistic” Unfunded Pension Liabilities (structuredsettlements.typepad.com)