Detroit's Bankruptcy Is Just Politics By Other Means
Q & A: Governor, emergency manager defend Detroit bankruptcy
Less than 24 hours after Detroit filed the largest municipal bankruptcy in U.S. history, the two men behind the historic action - Michigan Governor Rick Snyder and Detroit Emergency Manager Kevyn Orr - defended the move in an interview with Reuters.
While insisting the state had no plans to bail out the city, the Republican governor pledged that Lansing would become a "partner" with Detroit on specific projects such as public safety and parks.
Orr, meanwhile, said suburbanites were already rallying around the city, even as he conceded that municipal unions may never fully support the initiative.
Reuters: What impact will Detroit's filing have on the borrowing ability and interest rates for the state and other Michigan municipalities?
Snyder: Detroit is a unique situation ... $18 billion in liabilities. The system is set up where each jurisdiction should be borrowing on its own capacity. And so, as a practical matter, it should not impact on the surrounding municipalities.
Reuters: Now that Detroit has filed, have you changed your mind about what role the state needs to play in the process? Do you have support from Republicans?
$18 billion and in the end nobody is going to be responsible 
:)
Kids, be a politician and steal as much as you can - and then just quit and be insulted for false accusations
they should ask for a bailout
18bill and only in dollars (monopoly money)
and one yrs profit for JPM or GS
3 trillion to the bankers in their bailout when some did n't even need it, but alittle extra casino money so they could buy the bottom of the market in March 2009
and nothing except a few million for Detroit
again we see something has gone seriously wrong in the US
they should change industries and becoming the largest cannabis growing city in the US (now that its legal)
they should ask for a bailout
18bill and only in dollars (monopoly money)
and one yrs profit for JPM or GS
3 trillion to the bankers in their bailout when some did n't even need it, but alittle extra casino money so they could buy the bottom of the market in March 2009
and nothing except a few million for Detroit
again we see something has gone seriously wrong in the US
they should change industries and becoming the largest cannabis growing city in the US (now that its legal)It seems that they are trying to do the same thing as the banks
Everybody wants to be "saved" on the account of taxpayers money (so far banks bailout costs each taxpayer in the US over $90.000 per man)
90k's alot of money and surely could of been better spent
if they had given a 1/3 to each person - its likely most would of blown it on holidays and shopping in 6months to a yr anyway
thus boosting the economy and corporate profits and we all could of had one long party on the bankers
when the next crash comes it'll be a cash grab like cyprus and they will try to take the 90K
but what they do about Detroit i have no real idea, apart from growing the weed
maybe teach them all to trade the forex
90k's alot of money and surely could of been better spent
if they had given a 1/3 to each person - its likely most would of blown it on holidays and shopping in 6months to a yr anyway
thus boosting the economy and corporate profits and we all could of had one long party on the bankers
when the next crash comes it'll be a cash grab like cyprus and they will try to take the 90K
but what they do about Detroit i have no real idea, apart from growing the weed
maybe teach them all to trade the forexnext crash will be exactly the same like Cyprus, except for one thing : there will be no 100.000 limit. They already eyed that and we can rest assured that nothing, but nothing will be secured from them in the times of the next crash
Casinos, not cars, are keeping Detroit afloat
Detroit is known as the Motor City, but perhaps it should be known as Blackjack City.
It's the city's three casinos that are now crucial to keeping the cash-strapped government functioning during bankruptcy.
Most of the auto industry's Michigan plants are outside of city limits, severely limiting how much tax revenue they contribute to Detroit. General Motors (GM, Fortune 500) is the only automaker with headquarters inside of city limits, and Chrysler Group operates just one plant inside the city.
Filings made by the city in the nation's largest municipal bankruptcy late Thursday show just how dependent the city has become on the monthly infusion of cash from its casino tax. The $11 million Detroit clears from the casino tax every month is "is roughly the equivalent of 30% of the city's total available cash on hand as of June 30, 2013." It also says the casino tax could pay for the city's entire fire department, or about half of the police department.
"With 4 of the top 10 most dangerous neighborhoods in the nation, the city needs access to [the casino] money immediately to ensure public safety and keep its police on the streets and its firefighters responding to fires," said the filing.
So who owns Detroit then?
If a city depends on casinos it is straight forward what is happening and why
So who owns Detroit then? If a city depends on casinos it is straight forward what is happening and why
It seems that they are trying to get to some tax income and that the only "industry" still working are the casinos. It is always like that : in the time of crisis people are resorting to luck and hope. That is probably the primary reason why casinos are so interesting to everybody there right now
Anyway, it does not looks good, and if it starts like avalanche (some other major Cities in the same s...) it might be disastrous
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Prussian military theorist Carl von Clausewitz famously declared war is “mere policy by other means.” Detroit’s bankruptcy is similar. Saddled with billions of dollars in bond debt and pension obligations it can never repay, Michigan’s largest city has resorted to settling its deep-rooted fiscal and political problems in court.
By filing Chapter 9 bankruptcy, Detroit has effectively handed its fate over to a federal bankruptcy judge, along with the difficult questions of how to divide its inadequate resources among more than 100,000 creditors. Among other things, that judge will have to tackle the politically charged question of whether the city’s public employees can jump ahead of bondholders and other creditors to collect pension payments that vastly exceed both financial reserves and the city’s likely ability to repay.
“This was going to be battled out politically inside or outside of bankruptcy, and that’s not going to change,” said David A. Skeel, a professor at the Univeristy of Pennsylvania Law School who has written extensively about the political and legal questions swirling around government insolvency. “The court is a referee, an umpire, but ultimately the parties have to make the proposals.”
Already, a Michigan state judge has declared the bankruptcy filing illegal because it violates a provision of the Michigan Constitution prohibiting any modification of public pensions. Federal law trumps state law under the U.S. Constitution’s Supremacy Clause, however, so Skeel thinks there is a good chance the Michigan judge will be overruled eventually.
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