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Goodbye, Pensions. Hello, Solvency. Detroit Leads the Way.

Written by Gary North on May 14, 2013

Detroit is bankrupt. Everyone knows this. Everyone has known it for months. It is not official, but it’s close.

The pension holders are going to see their dreams blown to dust. They are the cause. They will be the solution.

The state has sent in The Terminator. He can shut the city down. He can default in the city’s name. He does not have to compromise with any special-interest group. He holds the hammer.

Anything that looks like a nail soon will be hammered.

This is a foretaste of things to come. One by one, America’s cities are going to follow Detroit. It will take time, but the trend is clear.

It’s goodbye, pensions; hello, solvency. “But we were promised our benefits.” Indeed. But when a city goes bankrupt, the promises are broken.

“It’s not fair!” Bankruptcy doesn’t care about fair. It cares about solvency after bankruptcy.

“But we made plans!” Make new ones.

There are pensioners who thought they had it made. Things will be unmade.

Continue Reading on www.reuters.com

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8 thoughts on “Goodbye, Pensions. Hello, Solvency. Detroit Leads the Way.

  1. Bankrupt Everybody says:

    Then, after the middle class is broke, the small businesses are broke, the local city governments are broke, the county and the states are broke, then and finally then, the federal government will be in complete charge of everything and everybody. What a wonder to behold that will be. And, you can all thank a liberal or whatever you choose. It won't really matter at that point.

  2. CrustyOldGeezer says:

    How come it is that the voters in detroit spent all those years voting for what they wanted, now seem a bit fussy over the results of their votes?

  3. Detroit is a microcosm of the USA. This is what America has to look forward to under our Marxist in Chief.

  4. Bill McCroskey says:

    Only fair … the Federal government's sham bankruptcy of G.M.(or ….Obama's vote buying of union members as we call it) stole WAY more from me than 99% of these pensioners would have ever collected. Welcome aboard …

  5. F.N. ignorant says:

    Greedy government and supporters of greedy government caused this and now government screw its supporters, default on their pensions and then re-start the debt Ponzi with a new set of patsies. But all of this is just a symptom of the underlying problem without which none of this scammery could ever have taken place: fiat currency and fractional reserve banking. Take that scam away and none of these Wimpy promise (I'll gladly pay you Tuesday for something you do for me today) economic deals could ever have taken place. In other words, pensions are a form of credit. The pensioner is providing a loan of their labor to the government who promises the pensioner a ridiculously high rate of return on the deal. Of course government has no money of its own which is why it's happy to pledge the money of others as the source of income to pay for the interest on this debt. It's a debt Ponzi that appears to work until it doesn't and then boy it really falls apart. The moral: neither a borrower nor a lender be!

  6. You can always get the Enron folks to explain the bankrupt concept to the slow ones in the commie gubmint unions… which should be most of them. You broke the bank with your free ride… now get a job!

  7. This IS what happens when a liberal is re-elected to the oval office. Whether it be legally of illegally. Unless Our pitiful congress and house get their heads high enough to see the big picture and actually do their jobs they were elected to do it will ONLY get worse.

  8. BRA – Black Run America.