Detroit Filing for Bankruptcy

I heard that the Defined Benefit Pensions of the Detroit public labor unions are guaranteed by the state. So, even though the city of Detroit acted irresponsibly for decades, the taxpayers of Michigan will continue to pay the Detroit retiree's pensions? That makes no sense and who knows what the long term consequences will be for Michigan.

My wife worked for an airline that went belly up. The funds in that company's Define Benefit Pension plan were turned over to the federal government's Pension Benefit Guaranty Corporation (PBGC). Now, when she retires, instead of several thousand a month, she'll receive $400/500 a month from the PBGC. That's how the real world works.
 
From what I understand, about 75% of their defined benefit is funded. They will likely receive 1/10 of the unfunded portion. So, almost the same as your wife.

If Obama wants to save Detroit, he should sell off some of the massively expensive buildings in DC and move those employees to Detroit. The government will profit and DC won't miss the jobs at the growth rate going on there. Then, when new employees are hired, they can be paid based on the cost of living in Detroit not DC. More savings. It would also give Detroit a stable tax base if those people are willing to live in the city.
 
All Detroit's mayors since 1962 were Democrats who were eager to micromanage and spend. Detroit has the only utility tax in Michigan, and its income tax is the third-highest of any big city in America (only Philadelphia and Louisville take more). Detroit's automakers got billions in federal bailouts.

The Detroit News revealed that Detroit in 2011 had around twice as many municipal employees per capita as cities with comparable populations. The city water and sewer department employed a "horseshoer" even though it keeps no horses.
 
A lot of good discussion on this thread but too much seems to revolve around the symptoms rather than the root cause which was an extremely anti-business political climate which eventually led to the killing of one of the largest manufacturing bases in the world. Had the jobs stayed in Detroit then folks would not have moved out and the tax base would not have dried up. Tax annexation would have helped but not to the extent needed. There was no way to compensate for the mass exodus of jobs from Detroit. This should serve as a cautionary tale for other cities with similar anti-business attitudes. Don't bite the hand that feeds you or eventually the feet will start walking.
 
Apparently the filing of this bankruptcy is being called into question. Link.

I don't quite understand why this should be complicated. Can the City pay its creditors? If so, then they shouldn't be filing. However, my suspicion is that those who don't want the filing to occur (current city officials) are mostly upset that they're going to lose authority.
 
Comparing suburban between Dallas and Detriot is not even close. Collin County in the 60's, 70's 80's, Denton County in the 90's and 00's, two of the fastest growing counties year in and year out for many years. No way in hell that those cities or counties would ever let themselves be annexed by John Wiley Price and cronies.
 
Very interesting analysis on what caused Detroit's bankruptcy problems. Link.

Apparently Coleman Young was actually one of the most fiscally responsible mayors. Surprising.
 
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