Detroit is bankrupt

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http://www.bbc.co.uk/news/world-us-canada-23369573

The US city of Detroit has become the largest American city ever to file for bankruptcy, with debts of at least $15bn (10bn).

State-appointed emergency manager Kevyn Orr asked a federal judge to place the city into bankruptcy protection.

If approved, he would be allowed to liquidate city assets to satisfy creditors and pensions.

Detroit stopped unsecured-debt payments last month to keep the city running as Mr Orr negotiated with creditors.

He proposed a deal in which creditors would accept 10 cents on the dollar of what they were owed.

At the time of the announcement, Mr Orr suggested there was a 50-50 chance of the city needing to file for bankruptcy.

In a letter accompanying Thursday's filing, Michigan's Governor Rick Snyder, a Republican, said he had approved the request from Mr Orr to file for Chapter 9 bankruptcy.

Gov Snyder said "it is clear that the financial emergency in Detroit cannot be successfully addressed outside of such a filing, and it is the only reasonable alternative that is available".

Mr Orr has said that the long-term debt could actually be between $17bn and $20bn.

I would never normally advocate abandoning a major city outside of a major disaster but I can't see how this city can keep street lights on, hospitals open, police on the streets when it's finaces are in such a drastic mess.

Maybe that Robocop statue wasn't a good idea after all?
But don't worry, they'll just... pop down to the bank next town over and... withdraw some funds.

I'm afraid I don't have more than Detroit jokes to contribute. Crime and mechanic police is literally all I know about the city.

Quaxar:
Maybe that Robocop statue wasn't a good idea after all?
But don't worry, they'll just... pop down to the bank next town over and... withdraw some funds.

I'm afraid I don't have more than Detroit jokes to contribute. Crime and mechanic police is literally all I know about the city.

Oddly enough, wasn't part of the plot of robocop 2 that the mayor literally put the city up for sale?

ClockworkPenguin:

Quaxar:
Maybe that Robocop statue wasn't a good idea after all?
But don't worry, they'll just... pop down to the bank next town over and... withdraw some funds.

I'm afraid I don't have more than Detroit jokes to contribute. Crime and mechanic police is literally all I know about the city.

Oddly enough, wasn't part of the plot of robocop 2 that the mayor literally put the city up for sale?

Woah, you're right. Better watch out for police strikes following pension and salary cuts.
Maybe this is some eerie foreshadowing in some sort of self-fulfilling storyline. We built a Robocop statue just so it can come alive and fulfill the franchise.

It's damn close - OCP was the majority lender to Detroit, and after Detroit was unable to pay its loans OCP prepared to foreclose on the entire City.

Then, of course, Kain happened.

image

So, I see no way that this bankruptcy doesn't end up with an awesome and climactic finale.

Zeh Don:
It's damn close - OCP was the majority lender to Detroit, and after Detroit was unable to pay its loans OCP prepared to foreclose on the entire City.

Then, of course, Kain happened.

image

So, I see no way that this bankruptcy doesn't end up with an awesome and climactic finale.

Makes me wish we lived in a world with the COOL evil corporations instead of this world with the boring evil corporations...

I mean, would it really be too much to ask that someone like EA builds a deathray, or Monsanto to use GMO's to make supersoldiers to conquer somewhere? Step up your game evil corporations!

Atleast Boston Dynamics is working on terminators, but they arent even evil so far!

This reminds me of ex-Governor what's-his-name saying that the government should let the auto industry go bankrupt.

Quaxar:

I'm afraid I don't have more than Detroit jokes to contribute.

How about a famous line from "Kentucky Fried Movie"? ^_^

EDIT:

Mitt Romney!!! That was the name I couldn't remember.

I guess I'm healing from the horrors of the last presidential election. That or the horrors were so terrible my mind is trying to blot out the memories. O_o

It's honestly not as big of a deal as the media is making it out to be. Being from Michigan, we've been hearing about this for the last two years - it's something we not only expected, but prepared for. We were almost certain it was going to happen no matter what.

Bankruptcy also does not mean "that's it, life is over, I'm done for" like you'd imagine. Basically (and somewhat unfairly) all debt is canceled out and you just start over. I'm not sure how that works for a city but people do it all the time as a means of getting back in control of their finances.

This will actually end up being what Detroit NEEDS to happen in order to continue the agonizingly slow recovery it's been seeing the past few years.

I live just outside city limits, bought a house here last year in Warren. You'd think we'd all be riding around in spiked vehicles wearing tire tread as armor, but from mile to the next the kind of neighborhood you're in varies quite a bit. I found a nice quiet street. People have got it pretty easy provided they can hold down a job; living, housing and energy costs are not too bad. Some crime creeps into the suburbs, but mostly on the lower east/west sides.

I really don't see how it could get any worse at this point, there's hardly anyone left to absorb. Detroit has a population of around 600,000 while the tri-county area is home to 3.2 million other residents. Of the 600,000, a little over half the population are either children under 17 or folks nearing/at retirement age. Things may get a little worse when surviving spouses of big 3 auto workers die off and families lose that pension money- but people are packing up and leaving as it is.

Eventually, there will be renewal here. Where else are you going to find so much property up for grabs with such close proximity to abundant fresh water?

Sometimes I think about where else I would like to live, and I've been around. The rest of the country is either too spread out and rural for my liking, or too tightly packed. There's definitely something pretty unique about the Detroit metro area, and if you just put in your 40 hours a week the livings easy.

xDarc:

Eventually, there will be renewal here. Where else are you going to find so much property up for grabs with such close proximity to abundant fresh water?

.

Buffalo NY?

The city used to have around 1 million people, now its down to 250k. That said, Buffalo will never experience a renewal, the city has been dying for over a century now. But property here is dirt cheap at least, my friend bought his first home for 65k (1200 sq feet, little bit of a fixer-upper)

Ryotknife:

xDarc:

Eventually, there will be renewal here. Where else are you going to find so much property up for grabs with such close proximity to abundant fresh water?

.

Buffalo NY?

The city used to have around 1 million people, now its down to 250k. That said, Buffalo will never experience a renewal, the city has been dying for over a century now. But property here is dirt cheap at least, my friend bought his first home for 65k (1200 sq feet, little bit of a fixer-upper)

I was born in Buffalo but moved down south to North Carolina in 2000 and you're right, the city is pretty much dead. Used to be great, now I much prefer it down here.

As for Detroit, we've all known it was coming so odds are they're prepared and nothing horrible will happen.

Is anyone here alive to remember a Republican mayor of Detroit? The bill has come due for living beyond their means. Maybe a lesson can be learned.

xDarc:
people are packing up and leaving as it is.

"Will the last person to leave Detroit please turn off the lights" has been a thing for a couple generations now. It's sad. This is what happens though when an area grows too dependent on one industry. That industry takes a turn for the worse, or just plain decides to up and move and you're doomed.

evilneko:

xDarc:
people are packing up and leaving as it is.

"Will the last person to leave Detroit please turn off the lights" has been a thing for a couple generations now. It's sad. This is what happens though when an area grows too dependent on one industry. That industry takes a turn for the worse, or just plain decides to up and move and you're doomed.

The city where I live had this happen back in the late 80s to early 90s. We used to rely heavily on a mill and subsequent industries, mill closed up shop and town went into a spiral. Luckily it recovered and moved into tourism before things got bad.

there was a thing on CNN earliersay that average police response times int he USA is 11 minutes but in detroit its 53 minutes. if any city needs robocop its there

You know what will happen right, Detroit will be under financial guidance for a while. It isn't as if from this day on there is no electricity anymore. BUT expect very heavy cuts on expenditures and it will hurt the city and the people that live in it. Basic functions will remain running but probably at lower levels.

This in time makes the city less attractive, in time though with the debt cleared it can mean that detroit can sell itself as a cheap starter City. Some places are really expensive to life and if detroit can undercut them in living costs. Even if living in Detroit will be less nice.. for some people it might be the way to go.

Of course it could lead to slums...

Mmm, remind yourself don't look at it as all negative. Other Cities have been bankrupt to and in time they made it out back to a healthy City. But the process will be painful.

Copper Zen:
This reminds me of ex-Governor what's-his-name saying that the government should let the auto industry go bankrupt.

Quaxar:

I'm afraid I don't have more than Detroit jokes to contribute.

How about a famous line from "Kentucky Fried Movie"? ^_^

EDIT:

Mitt Romney!!! That was the name I couldn't remember.

I guess I'm healing from the horrors of the last presidential election. That or the horrors were so terrible my mind is trying to blot out the memories. O_o

I have a friend who lives up near detroit and he says it's a shit spiral.

Believe it or not, we talked about Deus Ex: Human Revolutoin and we both agreed it would be great if someone came in and repurposed all those empty factory floorspaces into something great and started rebuilding the economy.

Explain to me, someone, how a city can go 'bankrupt'? Because..No, no, really, I have no idea how that would work.

Realitycrash:
Explain to me, someone, how a city can go 'bankrupt'? Because..No, no, really, I have no idea how that would work.

Public works.

Things like trying to maintain roads, pay various employees, power, police, emergency services ect. All the little things that the city provides adds up. And with Detroits major industries fleeing, and no longer providing income for taxes and paying employee's who then have no income and cant be taxed...the debt piles up faster than taxes can be collected, and a metropolis like detroit was can have MASSIVE expenses.

Desert Punk:

Realitycrash:
Explain to me, someone, how a city can go 'bankrupt'? Because..No, no, really, I have no idea how that would work.

Public works.

Things like trying to maintain roads, pay various employees, power, police, emergency services ect. All the little things that the city provides adds up. And with Detroits major industries fleeing, and no longer providing income for taxes and paying employee's who then have no income and cant be taxed...the debt piles up faster than taxes can be collected, and a metropolis like detroit was can have MASSIVE expenses.

Uh, where I live, as far as I know, the state provides for all that if the income is too low from the city itself. Oh well.

Desert Punk:

Realitycrash:
Explain to me, someone, how a city can go 'bankrupt'? Because..No, no, really, I have no idea how that would work.

Public works.

Things like trying to maintain roads, pay various employees, power, police, emergency services ect. All the little things that the city provides adds up. And with Detroits major industries fleeing, and no longer providing income for taxes and paying employee's who then have no income and cant be taxed...the debt piles up faster than taxes can be collected, and a metropolis like detroit was can have MASSIVE expenses.

Stupidly expensive pension plans apparently take up more than a third of the city's budget.

Took them long enough.

Detroit is sort of a modern boom city. It was dependent on a single industry, like the old days of train cities. However, that industry is far more global than it used to be, or uses so many robots that it is not nearly the job creator it used to be.

Realitycrash:
Explain to me, someone, how a city can go 'bankrupt'? Because..No, no, really, I have no idea how that would work.

Simple. It takes debt (independent of the state and nation it is in) from banks and can't pay it back. Normally this does not happen, because the cities that really can take out giant loans are also the cities that have tons of people, industry, jobs, or entertainment. Even if the city doesn't pay off it's debt very fast, it's not a problem if they always make the payments.

Detroit used to be one of those cities. It got loans to pay for giant works projects, lots of pension funds, ect. However, the US car industry changed. Japanese and European car makers started to have a huge presence here, the car industry used robots instead of people, major names were bought out by foreign companies (the Jaguar line is currently owned by an Indian line). The jobs dried up, the tax base dried up.

I've heard they might take all the abandoned buildings, bulldoze them, and turn them into farmland...or something like that...

KingWein22:
I've heard they might take all the abandoned buildings, bulldoze them, and turn them into farmland...or something like that...

I doubt they'll become farmland. After being an urban sector, that land wouldn't be fit for being farmland. The cost to get all of the concrete and infrastructures hauled out, and then to get good dirt hauled in would be astronomical. If nobody buys the buildings to refurbish or build something else on the land, they'll probably just be left to rot until they become structurally unsound, and then get bulldozed.

There's a lesson to be learned here. Detroit was a Democrat run city that kept insisting to spend beyond it's means. Detroit is a shining example of where big liberal government ultimately leads. You simply can't keep spending in perpetuity. High taxes and government overspending is, and always will be, a recipe for failure.

Take it away Mr Obama!

"Paying off in a big way" indeed . . . . . The President went on to say that if he had a city it would in fact look like Detroit. He also wanted it to be known that Romney would have let Detroit go bankrupt from the get go where as he instead paid 89 billion of our tax dollars for the privilege.

In an effort to attract more people into the city Detroit has started advertising to the hard core survivalist crowd. Starting very soon they will be taking out ads in various doomsday prepper publications that read "Want to live off the grid? Come to Detroit, we can't afford the grid."

The new city motto? Detroit, we finally ran out of other people's money.

Runners up included: *cough* credit twitter *cough*

* Yes we can (if the court approves our bankruptcy)

* Union Made

* America's progressive cesspool. We'll leave the lid up for you.

* How can we be broke when everything was free?

* Live within OUR means? We can't even live within YOUR means!

* Detroit! You can see Canada from here.

* Like Chernobyl but without the radiation.

* We are what three generations of dependence look like

* America's own third world country.

* Hope and change proof of concept.

* Poverty is job one!

* Our crime rate is always dropping because there's nothing left to steal.

* We accept EBT.

* Widest selection of abandoned crack houses per capita.

* Home of 768,000 liberal voters.

* We gave you what you voted for.

* From the penthouse to the outhouse in 50 short years.

* When in doubt make promises you can't keep.

* New Debt City.

* Hey mister spare some change?

#NewDetroitCityMottos

Quaxar:
Maybe that Robocop statue wasn't a good idea after all?
But don't worry, they'll just... pop down to the bank next town over and... withdraw some funds.

I'm afraid I don't have more than Detroit jokes to contribute. Crime and mechanic police is literally all I know about the city.

Hey that statue is the only hope these poor guys have left, Robocop's Detroit looks like Malibu to Detrioters these days...

Super Not Cosmo:
*le snip*

...

...tbth i always put Detroit's decline down to the fact the rest of the world (and even most of the US itself) wasn't that interested in buying "huge shitty gas guzzling American cars"...

Sleekit:

Super Not Cosmo:
*le snip*

...

...tbth i always put Detroit's decline down to the fact the rest of the world (and even most of the US itself) wasn't that interested in buying "huge shitty gas guzzling American cars"...

Sleekit, let him have his moment. He seems so happy. Don't wanna spoil it.

Considering how long ago tons of businesses in Detroit went bust, I'm honnestly surprised they lasted this long. On a side note, what other cities have filed for bankruptcy before? Or is it just Detroit... hang on, I'm on the internet! I'll look it up.

...

...

...

...

Ah, apparently there have been more than a handful of cities (and a few dozen municipalities) that have filed for bankruptcy, but about half of them have been dismissed. I didn't even know this was a thing... Anyway, here's the list of the major cities if anyone is interested:

-- City of Detroit
-- City of San Bernardino, Calif.
-- Town of Mammoth Lakes, Calf. (Dismissed)
-- City of Stockton, Calif.
-- Jefferson County, Ala.
-- City of Harrisburg, Pa. (Dismissed)
-- City of Central Falls, R.I.
-- Boise County, Idaho (Dismissed)

Super Not Cosmo:
SNIP

..........
Please stop calling Democrats liberals -_-

Super Not Cosmo:
snip

Ah yes, further proof that most conservatives are heavily addicted to seething anger over some vast conspiracy of liberals that supposedly think money comes out of thin air.

As someone from a state recovering from a piss-poor republican governor (and thankfully recovering, since Jerry Brown got into office) I can tell you that one failing city (whose failure happens to be the result of being so heavily dependent on the auto-industry that when it left it just couldn't recover) is nothing compared to... Well, virtually every red state on the map. Yes, with the notable exception of Texas, under the "brilliant" governance of the Republican Party, red states have been draining us dry to pay for themselves, while us Blues seem to be much more self-sufficient.

Rather ironic, isn't it?

Witty Name Here:

Super Not Cosmo:
snip

Ah yes, further proof that most conservatives are heavily addicted to seething anger over some vast conspiracy of liberals that supposedly think money comes out of thin air.

As someone from a state recovering from a piss-poor republican governor (and thankfully recovering, since Jerry Brown got into office) I can tell you that one failing city (whose failure happens to be the result of being so heavily dependent on the auto-industry that when it left it just couldn't recover) is nothing compared to... Well, virtually every red state on the map. Yes, with the notable exception of Texas, under the "brilliant" governance of the Republican Party, red states have been draining us dry to pay for themselves, while us Blues seem to be much more self-sufficient.

Rather ironic, isn't it?

First off Governor Moonbeam was a total and complete failure his first time around and if the current state of California is anything to go by he hasn't changed much since. People are leaving California like rats off a sinking ship. Currently for every 100 people who move into the state 120 move out. California is home to high taxes and a garbage economy.

As for the Detroit and the auto industry, well the reason the auto industry failed so hard was largely in part, if not completely, to the greed of the UAW. Detroit was ran for a half a decade by liberals who were bought and paid for by the unions and together they ran the city into the ground leaving behind what you see today. Detroit is the perfect example of what you get from long term liberal policies.

So while it is somewhat true that Detroit failed because of the problems in the auto industry a good many of those problems could likely have been avoided if GM were not being strong armed by a union that refused to budge even an inch.

Even though the people at the top of the UAW were well aware their demands would cause these companies to ultimately go bankrupt they still insisted on 7 paid weeks of yearly vacations, job banks in which UAW members out of work are paid nearly their full wages to not work, and a salary and benefit package that averaged around $74 per hour which is close to double what the average Japanese auto worker is paid and three times what the average private sector worker makes. Thanks to this each and every car had an extra $1200 in employee benefits slapped onto the price that buyers didn't have to pay if they bought from foreign auto maker. All totaled the average auto worker was paid $130,000 yearly in wages and benefits. Meanwhile GM alone had to pay over 100 BILLION since 1998 in just retiree healthcare payments.

So while the rest of the country was tightening it's belt through these recent hard times the UAW and it's members were living like kings and not giving a single inch. Of course why would they when Democrats were happy to just keep bailing them out time and again with tax payer money? And why wouldn't Democrats keep bailing them out when it is the massive number of union members that keep them in office? From 1989 to 2012 the percentage of UAW donations to Republican candidates was ZERO PERCENT of their total donations.

So yeah, many of Detroit's problems can be linked to the problems with the auto industry. However, auto industry had the problems it did because of the unions who were running it into the ground all the while relying on tax payer dollars given by liberal politicians who were bought and paid for to keep the whole scheme afloat.

Witty Name Here:

Super Not Cosmo:
snip

Ah yes, further proof that most conservatives are heavily addicted to seething anger over some vast conspiracy of liberals that supposedly think money comes out of thin air.

As someone from a state recovering from a piss-poor republican governor (and thankfully recovering, since Jerry Brown got into office) I can tell you that one failing city (whose failure happens to be the result of being so heavily dependent on the auto-industry that when it left it just couldn't recover) is nothing compared to... Well, virtually every red state on the map. Yes, with the notable exception of Texas, under the "brilliant" governance of the Republican Party, red states have been draining us dry to pay for themselves, while us Blues seem to be much more self-sufficient.

Rather ironic, isn't it?

The only blue states that are doing well are Vermont, New Hampshire, and Maine. In other words, the "redneck" northern states.

Not to mention, blue states don't have to worry about natural disasters other than Ohio (for some odd reason) and California whereas the red states regularly get smashed by natural disasters pretty much every year. Even if the South was an economic paradise, the weather/environment alone would ensure it would remain a craphole.

Ryotknife:

Witty Name Here:

Super Not Cosmo:
snip

Ah yes, further proof that most conservatives are heavily addicted to seething anger over some vast conspiracy of liberals that supposedly think money comes out of thin air.

As someone from a state recovering from a piss-poor republican governor (and thankfully recovering, since Jerry Brown got into office) I can tell you that one failing city (whose failure happens to be the result of being so heavily dependent on the auto-industry that when it left it just couldn't recover) is nothing compared to... Well, virtually every red state on the map. Yes, with the notable exception of Texas, under the "brilliant" governance of the Republican Party, red states have been draining us dry to pay for themselves, while us Blues seem to be much more self-sufficient.

Rather ironic, isn't it?

The only blue states that are doing well are Vermont, New Hampshire, and Maine. In other words, the "redneck" northern states.

Not to mention, blue states don't have to worry about natural disasters other than Ohio (for some odd reason) and California whereas the red states regularly get smashed by natural disasters pretty much every year. Even if the South was an economic paradise, the weather/environment alone would ensure it would remain a craphole.

Not only that, but Red states have the lions share of government locations that would pay to the state. Lets just look at my state of Kansas: 3 Major Military Bases (Ft. Riley, Ft. Leavenworth, McConnel AFB), numerous nuclear missile silos (exact number classified), Federal Prison at Ft. Leavenworth (For Dangerous offenders, which was at one point considered as a replacement for Gitmo), The Army Displinary Barracks (a super-max prison for those court martialed by the army, as well as other highly dangerous offenders, also at Ft. Leavenworth). With all this money coming in, how in the HELL is a state of 3 Million people were most live in small towns and are farmers supposed to compete with the Feds, so of course we are going to get more in than we pay them.

And this is a trend throught the Midwest and South. The Midwest holds the countrys nuclear arsenal (which makes sense, being in the middle of the country and all that) as well as having many military bases, and the South has even more military bases due to their strong military tradition. Of course, there are cases of states legitimately not taking in enough (like Mississippi), but its not as common as he is saying it is.

Super Not Cosmo:
Even though the people at the top of the UAW were well aware their demands would cause these companies to ultimately go bankrupt they still insisted on

Citation required, as the UAW owns 17.5% of GM it would be counter intuitive for the UAW to deliberately bankrupt the source of much of their income (also given the healthcare arrangements the UAW has with GM).

BTW You are describing the unions of the 1980s, not todays unions (which have been vilified by the media and rendered impotent by work place agreements / individual contracts).

Super Not Cosmo:
Thanks to this each and every car had an extra $1200 in employee benefits slapped onto the price that buyers didn't have to pay if they bought from foreign auto maker.

Is that difference after the import pays transport costs, tariffs, import duty and taxes?

Super Not Cosmo:
So while the rest of the country was tightening it's belt through these recent hard times the UAW and it's members were living like kings and not giving a single inch.

Citation required.

The UAW has compromised an many occasions, including taking responsibility for retirees healthcare, lower wages and redundancies.

Meanwhile the CEO of GM is paid ~US$10 mill a year while the company was 'tightening it's belt'...

Super Not Cosmo:
Of course why would they when Democrats were happy to just keep bailing them out time and again with tax payer money?

Actually it was GWB who first bailed out GM with US$14 billion, to get these funds the UAW agreed to pay reductions.

Super Not Cosmo:
And why wouldn't Democrats keep bailing them out when it is the massive number of union members that keep them in office?

So you are saying that lots of people voting for their own interests is anti-democratic?

Or are you trying to say that it is only the unions that donate to, lobby or try to influence politicians?

Because it was not the UAW or GM workers who flew their private jets to Washington to beg Obama for more government funds.

Super Not Cosmo:
From 1989 to 2012 the percentage of UAW donations to Republican candidates was ZERO PERCENT of their total donations.

So the unions should fund a political party they do not agree with? Why?

And how much in dollars did the unions donate? How many times more did management donate?

Super Not Cosmo:
However, auto industry had the problems it did because of the unions who were running it into the ground all the while relying on tax payer dollars given by liberal politicians who were bought and paid for to keep the whole scheme afloat.

So management has no responsibility in the success or failure of GM? Or no ability to influence GM's financial course?
Why is GM paying them so much?

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