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Detroit’s City Pensioners Are Wiped Out.

Written by Gary North on July 19, 2013

It looked so easy. Go to work for the city. Get paid above-market wages. Get a pension. Get health care covered. It was Fat City.

It’s Thin City today. The city has officially gone belly-up. It has filed for bankruptcy. The city was in debt to the pensioners for $3 billion.  What about health care guarantees? Add another $6 billion.

They trusted the government. They will now get 10 cents on every dollar owed to them.

It was all so easy way back when. It was even easier for the city to walk away.

The Republican governor had this to say before the city defaulted.

Only One Feasible Path Offers a Way Out. The citizens of Detroit need and deserve a clear road out of the cycle of ever-decreasing services. The City’s creditors, as well as its many dedicated public servants, deserve to know what promises the City can and will keep. The only way to do those things is to radically restructure the City and allow it to reinvent itself without the burden of impossible obligations. Despite Mr. Orr’s best efforts, he has been unable to reach a restructuring plan with the City’s creditors. I therefore agree that the only feasible path to a stable and solid Detroit is to file for bankruptcy protection.

This is the thing about impossible obligations. They get abandoned. This confirms economist Herbert Stein’s law: ‘When things can’t go on, they have a tendency to stop.”

A year ago, the experts denied that anything was wrong. Yes, there were “problems,” but nothing that could not be fixed. “Bankruptcy? Are you serious? Of course not. There is no possibility of that. Such talk is inflammatory. Perish the thought.”

That’s what politicians always say . . . right up to the end.

The pensioners will have to go back to work. They will be covered by Medicare only. They believed the politicians. They invested their working years in terms of promises made by politicians.

The city will get away with it. Across the nation, politicians will think, “Well, that was easy.” They will of course assure their employees and pensioners that nothing like this could happen. “Bankruptcy? Are you serious? Of course not. There is no possibility of that. Such talk is inflammatory. Perish the thought.”

When things can’t go on, they have a tendency to stop.

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9 thoughts on “Detroit’s City Pensioners Are Wiped Out.

  1. If you look to anything or anyone other than God for your provision, then you are the proverbial fool.

  2. EHeassler USN-Ret. says:

    The United States as a nation should be looking at Detroit as the model for where we are financially. The U.S. economy and debt structure is no different than Detroit's with one major exception and that is that the federal government can print money. Printing money doesn't create wealth, it dilutes it. The paper fiat money is only worth the paper its printed on and merely reflects the goodwill and faith of the people who are bound to use it. Once either are gone, the money will have no value and we will become the Wiemar Republic prior to Hitler. We are closer than we think. Our currency is being devalued on a daily basis. Cities and states are either declaring or nearing bankruptcy, we have a so-called leader who is actually dividing the country into factions that may become violent, and also one who promises change. And all while launching an all out attack on our individual freedoms and the U.S Constitution. After the Reichstag Fire in 1933, Adolph Hitler had total control of Germany within 38 days. I"m not sure of a starting point, but we are only one major event away from a "Reichstag Fire" of our own. We need to impeach and turn out our "Fraud-In-Chief" before he finishes destroying us as a democratic republic.

  3. IndianaSkyhawk says:

    Dream on!
    What you print here is what SHOULD happen. Do you really think it will be that bad? Think about how they got there. They will not give up without a fight, and will retain most, if not all of it – at OUR (the taxpayer-AGAIN) expense.

    Time will tell.

  4. It serves them right for being so stupid. We need to do the same with federal workers including ex Presidents, Senators and House members. Members of Congress should never have been given a pension in the first place. Our founders called it government service for a reason.

  5. Don't forget the workers at the state, county and city level. They have been hosing the taxpayers for the last 30/40 years where their pensions are outrageous. Let them get the same pensions that us a-holes get from social security and have to wait until 66/67 years old to retire. Legal theft is what I call it. The sooner it stops the better. They were hired as public servants not scam artists. Put 'em on medicare too, and see how they like that.

  6. shorewater says:

    This is the result of Lyndon Johnson's "great Society" programs.

  7. So goes Detroit, so goes America…..

  8. 2WarAbnVet says:

    No worries, they still have Obamacare!

  9. What these retired fat cats give themselves is enough to want to put them all on an Island and then sink it.. They get filthy rich in office then want more to retire on. Retirement for politicians should be zero nothing natta. They made their millions while in office ripping off the tax payers. Nothing but a bunch of money grabbing SOB's