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Detroit’s City Pensioners Finanally Figure It Out After 40 Years: No Pensions.

Written by Gary North on July 22, 2013

For 40 years, it has been obvious to conservatives that Detroit would go bankrupt if the government would not change its ways. The government was running up huge bills to the workers for pensions and health care. Detroit was the poster child of bad government.

Nothing changed. The Democrats had a lock on the city’s politics. “Try and stop us!” Nobody stopped them. “You don’t have the votes!” But one man did have the vote. It was “one man, one vote.” He was appointed by the Republican governor. He pulled the emergency cord on the city’s gravy train. He announced: “Try and stop me! You don’t have the votes!”

Detroit’s government is bankrupt. The city’s pensioners offer their tales of “betrayal.” They want blood out of the second-largest turnip in America. (The largest fiscal turnip is the U.S. government, with unfunded liabilities well over $220 trillion, but it has the Federal Reserve System to bail it out for now.) Detroit has only the distant hope of a state or federal bailout. That is not going to happen.

Some county judge has declared that the city has no right to go bankrupt, as if the judge has the ability to provide a transfusion of solvency into the turnip. Everybody is ignoring the judge.

Fiscal conservatives have said for years that this was inevitable. We were dismissed as crackpots. The red ink could flow forever, we were told. “No problem!” They say the same thing today about the federal government. The suckers line up for jobs with the federal government, with its fat pensions and unfunded liabilities. The result will be the same: default. The wailing will spread. “Betrayal! It’s just not fair!” They think budget deficits reflect fairness. Red ink is their natural right as employees. “A contract’s a contract!” Yes, it is. And bankruptcy breaks all such contracts. But the suckers never figure it out until it’s too late.

Cities can do what individuals do: run up large bills, and then declare bankruptcy.

The voters will shrug off 20,000 pensioners who lived in a fantasy world all their lives. They are no longer politically viable. They are merely a tiny voting bloc that has no money to give to campaigns. Not any more they don’t. The New York Times reports:

In recent years, public sector pensions have often emerged as a political point of contention, earning scorn from taxpayers who work in the private sector, where defined-benefit pensions providing a guaranteed stream of income in retirement have grown increasingly rare.

The Times collected a list of “betrayal!” stories. We will see variations of these stories for the rest of our lives. One by one, cities and states will avail themselves of the bankruptcy laws. This is their way out. They will take it. They are already taking it. Then they will start over, running up bills to stupid bond investors. “Fool me once, shame on you. Fool me twice, shame on me.”

Shame on them. Latin America has been doing this to stupid bondholders for 200 years. It’s so easy. Run up the bills, and then default. New suckers always come back for more.

Red ink has consequences. Bankruptcy is one of them. The defenders of perpetual red ink cry: “It’s unfair! It’s just not right!”  That’s the thing about red ink. It has defenders right up until the inevitable day of reckoning. Then the suckers who believed deeply in fantasy budgets get their lesson in reality.

Continue Reading on www.nytimes.com

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8 thoughts on “Detroit’s City Pensioners Finanally Figure It Out After 40 Years: No Pensions.

  1. 2WarAbnVet says:

    As Detroit goes, so goes the nation. We can easily see what happened in Detroit happening to the rest of us, with the parasites growing in relation to the producers.

  2. ConservativeValues says:

    The UAW pensions are just another example of a pyramid scheme being imposed on American taxpayers. How can anyone with any semblance of brains believe that people can get paid in perpetuity and fund those payments by collecting from the workers of tomorrow.
    Pensions are 'fuzzy math' Progressive Liberal schemes that make no sense to any one with common sense.
    Keynesian economics have never worked … and never will!

  3. Don't forget that Obama rewrote Bankruptcy law in the GM bailout in order to favor the unions. They could bring pressure to bear on that federal judge to do it again. Hopefully he won't bend.

  4. Poverty has a way of aligning people's visions to realities. Please note how hard Indians and Chinese workers toil. That's not because they are "poor" but because they want to live well.

    Complacency, created by a generation or two of "Progressive" government, will be purged from the people by poverty.

  5. I hope they dump the health care coverage for retirees before they cut their pension income. Dump them on Medicare and let it go broke. Cutting retirement income, however, would be pretty rough on the former employees that didn't do anything wrong except believe a fantasy.

  6. A long stream of Democrap politicians and mob-controlled unions doomed Detroit. I hear that the 'experts" (at what?) say the auto unions didn't have much to do with Detroits demise, it was the gummint employees unions. When you have strong unions in one sector, you have them everywhere. like cock roaches. Besides, unions and democraps go together like peas and carrots. The democrap politweasels give away the farm to the unions, and in return the unions donate their members dues money to the democraps' campaign funds, so they can get re-elected and give the union members more benefits. It's a never ending cycle called tax dollar recycling, The politweasels benefit, the union bosses benefit, the taxpayer looses.

  7. WhiteFalcon says:

    The concept of "fair" is a figment of man's imagination. It is not reality. This is something that many people do not understnad. Also, everyone's idea of "fair" is different and always benefits them. But "fair" does not exist in reality, but stupid does, and that is exactly what has been ruling these bankrupt cities as well as all the ones that are about bankrut. Cities should not be funding pensions. Everyone should have his own retirement fund that goes with him wherever he goes so that when he changes jobs, his retirement fund goes with him. Then the cities woudln't be on the hook. They would just put a fration of each employee's pay into his retirement fund and when the emloyee retires, the dity is out of it. DUH. It isn't rocket science. It is common sense, but that is in short supply in government at all levels.

  8. I dont feel sorry for the people that stand with the unions they will all go under someday they all better wake up and get away from the unions they are all crooks and dont give a dam about the people only themselfs they want to line there pockets and have control