Who should be responsible for pension bills in Detroit?

[kaz]

For those who understand why there is no such thing as a social security trust fund, this is going to scare the snot out of you. For those who believe in the fantasy land belief that government loaning itself money is an asset, nothing is going to get through to you anyway, so just have a cookie and smile. However, here is the reality.

All those years of negotiations between government workers at the local, State and Federal level, including and particularly teachers, the reality is that government never saved a dime to pay for it. Just like social security, all those retirements were simply promised against future taxpayer money. And like Social Security, IOUs from government to itself were written. My mother was a physical therapist for the Kalamazoo school system, and she’s learning now that there are no assets behind her pension as well.

Which is why those plans are so generous. The people who promised them didn’t pay for them, and they knew they’d be long gone before the bills came due. Guess what, they are coming due. It’s not just social security that was unfunded by our parents, it’s every one of those workers, who are now coming to us to make good on promises that were made with no money to back it up.

None of this information is new. All the contracts were negotiated and agreed to by the unions without any of the governments putting up dime one to fund them. And it was public information, no one wanted to think about it. So, who should be responsible for this?

- Workers who looked the other way and supported unions who negotiated the deals for them?

- Today’s taxpayer who wasn’t involved at all.

Yes, it’s too bad. But taxpayers should not be stuck with other people’s bills just because we feel sorry for them. The fact is they worked for employers and were promised pensions without anything being saved to cover them. Private sector pensions have minimum funding requirements. Government sector pensions have none. They were planning to stick us for the bill. The bureaucrats knew they’d be gone, the union reps liked telling their members what great benefits they negotiated.

It’s too bad, but it’s not our problem. Government, BTW is still doing it. When some lame Democrat says we need to bail them out, tell them to fix the hole in the boat first.

 

[MACAULAY]

Detroit's pension obligations are between the public employees (and their Unions), on the one side, and the representatives of the taxpayers of the city of Detroit, on the other.

I hope the Detroit taxpayers can pay off their pension debts to their employees but it is nobody else's business if they don't.

If they don't its because its the end of another Socialist cycle--they've run out of other people's money.

 

[kaz]

Detroit's pension obligations are between the public employees (and their Unions), on the one side, and the representatives of the taxpayers of the city of Detroit, on the other.

I hope the Detroit taxpayers can pay off their pension debts to their employees but it is nobody else's business if they don't.

If they don't its because its the end of another Socialist cycle--they've run out of other people's money.

Thanks Macaulay. Good points on Detroit. Though the issue is that to pay the pensions, they are going to have to raise taxes and drive out more of their tax base. I don't think they can ever get there.

What I am pointing though is far beyond that. Detroit, because of the extreme depopulation the city, is hitting this first. They have a lot more pensions covered by a lot fewer people proportionally. However, what I'm saying is this is a massive problem affecting every city and State in the country and the Federal government will be way too bogged down in it's own unfunded pensions and social security to help. We're going to see wave after wave of this sort of thing happening. There's going to be a point where all these pensions are going to have to be dramatically reduced.

Between social security and government pensions, our parents are passing us unfunded liabilities of over $100 trillion. They promised it to them and walked away and are handing us the bills. This is only the beginning. We're rightly going to balk on paying that, and in a lot of places, they can't. Like Detroit.

 

[Soggy in NOLA]

More evidence of how the "work for twenty, retire for 30+" plan never works out well.

It's all so predictable.

 

[Edgetho]

When all these contracts were being negotiated, who represented the taxpayors of Dee-Troit?

Nobody.

Union thug says to dimocrap scumbag politician, "Give me a 30% increase in pay for my boys and I can funnel an extra Ten Million into your campaign.

"Not only that, but I'll guarantee thousands of my boys will be on the street carrying signs and working the GOTV. And if some Patriotic American Republican challenges you, we'll send goons to his house to picket it and follow his kids around. You can't lose"

Most of the time, the taxpayer doesn't even know it's going on. Anybody pay a lot of attention to when the Sewer Workers and Street Cleaners got a raise?

dimocrap scum been doing this for over fifty years. It works. It is an impenetrable wall of politics and Union corruption.

Who represents the taxpayer? dimocraps? That ain't even funny.

Certainly not the Union thug.

dimocraps would screw up a one-car funeral. And the proof of that is -- Dee-Troit.

One of the World's Greatest Cities at one time. Now it's just another dimocrap pus-hole.

And don't kid yourselves, the Unions and dimocrap scum knew EXACTLY what they were doing when they made those contracts.

We warned about it. Even FDR warned about it. We tried to tell anybody and everybody that would listen that Public Sector Unions were a bad idea. A VERY bad idea.

And they couldn't have cared less. Not their problem anymore. They got their Millions and they're gone.

Let the Employees, Retirees and Pensioners of Dee-Troit live in refrigerator boxes on the Street. I could NOT care less.

 

[MACAULAY]

Kaz---You sound young and you seem to resent the load of debt that the prior generation left for yours to pay.

You should be really pissed.

The debt owed to Pensions is part of a huge scam, repeated over and over, and it will break us.

The hope was that the example of Detroit would teach a lesson, but in fact....as long as the whores in Washington, and the corrupt officials in the big rotting cities...don't see the crash coming before the next election...then they don't care.

They call it "kicking the can down the road" but its reached the point of being "Russian Roulette".

The teachers in Detroit are left holding the bag for the corrupt bargains their representatives made...and your generation is going to get the same raw deal.

 

[kaz]

Kaz---You sound young and you seem to resent the load of debt that the prior generation left for yours to pay.

You should be really pissed.

The debt owed to Pensions is part of a huge scam, repeated over and over, and it will break us.

The hope was that the example of Detroit would teach a lesson, but in fact....as long as the whores in Washington, and the corrupt officials in the big rotting cities...don't see the crash coming before the next election...then they don't care.

They call it "kicking the can down the road" but its reached the point of being "Russian Roulette".

The teachers in Detroit are left holding the bag for the corrupt bargains their representatives made...and your generation is going to get the same raw deal.

No one at all seems to be connecting with that Detroit is just the beginning. Democrats are out there fighting every day to make the problem worse.

 

[ScreamingEagle]

Who should be responsible for pension bills in Detroit?

even though Michigan pensions are protected by their state constitution some believe that protection is not enforceable after bankruptcy....if that's the case watch out for the same problem hitting other cities across the country....

some also think that Detroit's pensions will be rescued by the PBGC (Pension Benefit Guaranty Corp).....PBGC is a government-created agency that sells to private companies insurance for pensions up to limited amounts but it receives no taxpayer money....like the EPA (sarcasm alert)they've been pretty busy in Michigan ......in 2012 they paid out about $380 million to more than 46,000 Michigan retirees in failed company plans.....

Detroit city will not be saved by the PBGC as they are not covered by them.....the last resort for state and municipal pensions is the taxpayer.....but things are such a hot mess in Detroit that raising taxes or finding a new revenue source is highly unlikely at this point.....and the rest of the state isn't exactly jumping to bail them out....

"Dramatic changes regarding pensions and retiree health care seem inevitable, even with any possible brutal legal battles ahead."

guess that's just more of the "change" Obama was talking about.....


Susan Tompor: Pension safety net won't help City of Detroit retirees | Detroit Free Press | freep.com

 

[RadioRefugee]

even though Michigan pensions are protected by their state constitution some believe that protection is not enforceable after bankruptcy....if that's the case watch out for the same problem hitting other cities across the country....

This is the pivot for the issue. What will the courts decide? It seems to be grossly unjust for the responsible MI residents living in responsible cities getting stuck with the irresponsible future obligations of a bunch of socialist thugs ruining a city. But we all know there are irresponsible socialist thug judges that would do it.

 

[Clementine]

Detroit's pension obligations are between the public employees (and their Unions), on the one side, and the representatives of the taxpayers of the city of Detroit, on the other.

I hope the Detroit taxpayers can pay off their pension debts to their employees but it is nobody else's business if they don't.

If they don't its because its the end of another Socialist cycle--they've run out of other people's money.

It looks like tax payers have been steadily leaving Detroit. The population went from over 2 million down to about 600,000 over the years. The city has been going downhill for decades and all of this was predictable, yet none of the Dems in charges acted on the warning signs. Now they try to blame Bush.

We can't start bailing out cities. If we begin giving Detroit money to get them caught up, we will be sending money every year to keep them going and I am willing to bet that they will keep promising cushy benefits and expanding local governments. They will still make sweet deals with the unions for their votes and they will dig themselves in even deeper. That is what happens when someone else foots the bill. And the politicians still need to buy votes more than ever. I expect that Bush will be blamed big time as they near the next elections. They have fucked the tax payers of Detroit. The few that remain should get out while they can.

Instead of bailing them out and trying to falsely blame others, Detroit needs to learn some valuable lessons about the amount of revenue vs spending. Others should learn from this, too, because other cities might be digging themselves a big hole.

 

[ScreamingEagle]

even though Michigan pensions are protected by their state constitution some believe that protection is not enforceable after bankruptcy....if that's the case watch out for the same problem hitting other cities across the country....

This is the pivot for the issue. What will the courts decide? It seems to be grossly unjust for the responsible MI residents living in responsible cities getting stuck with the irresponsible future obligations of a bunch of socialist thugs ruining a city. But we all know there are irresponsible socialist thug judges that would do it.

definitely a key issue....

if the U.S. Court declares that cutting of the pensions is OK vs the state protection law which says it isn't.....is this another Fed infringement on states rights....or does Federal bankruptcy law take over everything....?

 

[Trajan]

echoing what Edgetho said to an extent, there was NO ONE at the table negotiating for the occupants of Detroit other then those that would feather their beds.....the unions and the politicians.....


Christie said it 2 years ago to the unions and he had it right, don't blame me, blame all those folks that promised you the moon....


They will have to go the federal route and break those contacts, there simply isn't enough money coming in and the poor bastards left in that tax base have been taxed to the statutory limits for years now....its f*cking over.

The feds have the Pension Benefit Guaranty Corporation (PBGC) , they won't wind up in there and get 20 cents on the dollar, but I bet they take at least a 25% haircut...

 

[Katzndogz]

Detrroit ccould be bailed out under the same way the EU bailed Greece out. Let thee austerity riots begin.

 

[ScreamingEagle]

Detrroit ccould be bailed out under the same way the EU bailed Greece out. Let thee austerity riots begin.

Detroit is famous for its deadly riots...

 

[Lakhota]

Who should be responsible for pension bills in Detroit?

We should all chip in out of appreciation for all the great cars and music that came out of Detroit.

 

[Trajan]

Who should be responsible for pension bills in Detroit?

We should all chip in out of appreciation for all the great cars and music that came out of Detroit.

you go first....

 

[deltex1]

Quote:
Who should be responsible for pension bills in Detroit?


The Obabble death panels?

 

[Lakhota]

Americans owe Detroit a debt of thanks.

 

[dilloduck]

Who should be responsible for pension bills in Detroit?

We should all chip in out of appreciation for all the great cars and music that came out of Detroit.

You bought a clown car from them didn't you ?

 

[thereisnospoon]

For those who understand why there is no such thing as a social security trust fund, this is going to scare the snot out of you. For those who believe in the fantasy land belief that government loaning itself money is an asset, nothing is going to get through to you anyway, so just have a cookie and smile. However, here is the reality.

All those years of negotiations between government workers at the local, State and Federal level, including and particularly teachers, the reality is that government never saved a dime to pay for it. Just like social security, all those retirements were simply promised against future taxpayer money. And like Social Security, IOUs from government to itself were written. My mother was a physical therapist for the Kalamazoo school system, and she’s learning now that there are no assets behind her pension as well.

Which is why those plans are so generous. The people who promised them didn’t pay for them, and they knew they’d be long gone before the bills came due. Guess what, they are coming due. It’s not just social security that was unfunded by our parents, it’s every one of those workers, who are now coming to us to make good on promises that were made with no money to back it up.

None of this information is new. All the contracts were negotiated and agreed to by the unions without any of the governments putting up dime one to fund them. And it was public information, no one wanted to think about it. So, who should be responsible for this?

- Workers who looked the other way and supported unions who negotiated the deals for them?

- Today’s taxpayer who wasn’t involved at all.

Yes, it’s too bad. But taxpayers should not be stuck with other people’s bills just because we feel sorry for them. The fact is they worked for employers and were promised pensions without anything being saved to cover them. Private sector pensions have minimum funding requirements. Government sector pensions have none. They were planning to stick us for the bill. The bureaucrats knew they’d be gone, the union reps liked telling their members what great benefits they negotiated.

It’s too bad, but it’s not our problem. Government, BTW is still doing it. When some lame Democrat says we need to bail them out, tell them to fix the hole in the boat first.

As with social security, public employee defined benefit pensions are nothing but Ponzi schemes. Simply put, the workers and the taxpayers of the present, were to fund the retirees of the future.
With public worker pensions, government had absolute taxing authority to fund pensions wages and benefits for public workers.
It was a system that worked wonderfuily for the employees. The process was simple. The union bosses sought out supportive politicians. For their approval of new contracts, the union bosses promised virtual 100% support at the election polls. For 30 plus years it worked like a charm.
Take New Jersey for instance.
30 years ago property taxes were reasonable. In my home town the tax rate was right around $1.50 per hundred of assessed value. Right around the mid 80's, salaries for public workers began to skyrocket. Unions representing public employees used the excuse that housing prices were rising beyond the ability of public employees to afford them. Fair analysis. However, when the recession of the early 90's hit, home values plummeted, wages kept rising. To keep up, towns and cities simply increased taxes. Annual municipal budgets saw annual increases in the double digits. One year in my home town, the property tax levy was increased by 18%. The result was NJ had the highest average property tax rates in the nation. Things got so bad that the state legislature finally stepped in and capped annual tax levy increases at 4%. The reaction? The union bosses and many workers went nuts.
That levy cap is now 2%.
The bottom line is there is no more money. The people have been tapped out by confiscatory taxation.
The house my parents sold in 1984 for $110,000 with an annual tax bill of about $1,400. The home now has a tax value of almost $400,000....The property tax? Oh, it's nearly SEVEN TIMES what my parents were paying. It's almost $10k ( 960 per month) per year.
In some nearby towns, the tax rate is nearly $5 per hundred. A Home assessed at $500,000 has a tax burden of over $20k per year...Most of which goes to...paying public employee wages and benefits.
Public employees are in service to the public. There is no way those in service should be getting a better deal than those served. Equal? Yes. Better, NO WAY.