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Detroit is an instance of what is happening to America

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Detroit, from Paris of the west to rust. A federal judge decided today that Detroit could declare bankruptcy. That means that it is protected under Chapter 9.

“Chapter 9, Title 11 of the United States Code is a chapter of the United States Bankruptcy Code, available exclusively to municipalities that assists them in the restructuring of debts. On July 18, 2013 Detroit, Michigan became the largest city in the history of the United States to file for Chapter 9 Bankruptcy protection. Jefferson County, Alabama in 2011 and Orange County, California in 1994 are also notable examples. ("Municipality" under the Bankruptcy Code includes many types of governmental units besides cities.)[1]”,_Title_11,_United_States_Code

One thing that this means is that persons who earned retirement pensions from working for the city may be denied payment at the discretion of the “city emergency manager”.

Now, just imagine that you are on Social Security pension as your sole means of survival, and all of a sudden the government says that it can’t pay your pension anymore. You are now dead in the water. You may be dead on the street, left to starve. That is the spirit behind this action in Detroit.

No, that is not overreaction, it is the fact of the situation.

Alarms must go off across America because there are more municipalities than Detroit that are on the rocks financially.

Now, it may be that the cities need financial relief from their accrued obligations, but one would think that the very last place one would go is to pensioners. What does that action spell for morality in America? Detroit, “Paris of the west” is now America’s worst man made disaster.

“Detroit, once a city of 1.8 million and the home of the American auto industry, has suffered a long descent into financial crisis. The city was home to just 713,000 people, according to the 2010 Census, a mere shadow of its post-war apex. Huge pension costs and a recession that sent American automakers into their own financial tailspins exacerbated Detroit’s budget gaps.

On July 18, with Detroit facing an estimated $18 billion in debt and liabilities, it became the largest city in American history to file for bankruptcy protection. Almost 40 cents of every dollar the city collected was used to pay down debt, an amount the city said would skyrocket to 65 cents on the dollar without bankruptcy protection, according to the Associated Press. Detroit said it owed money to more than 100,000 creditors.

Under Chapter 9, the city’s emergency manager, Kevin Orr, will explore ways to pay off some of its debt while restoring some social services, all under court supervision.
Orr will be able to consider pension cuts as part of his final proposal, Rhodes ruled. But Rhodes said he would only allow the cuts if the final reorganization is fair, the Detroit Free Press reported. Unions protested that bankruptcy would threaten the pensions of retirees and current employees.”



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