Detroit files for bankruptcy

[tpaulus_2]

Don't get me wrong, I have no problem paying back my loans, because I gave my word that I would.

That's the comparison I was using them for though- the city of Detroit gave their word to those workers that in lieu of more $$ on their paychecks that they'd instead defer some of that $$ into a retirement account for said workers to depend on in the future. Now, they're trying to back out of paying them $$ that was both promised and earned. That's just wrong, it's basically akin to Snyder's self-appointed EFM robbing all those people of a lot of $$...

 

[Wazmankg]

Don't get me wrong, I have no problem paying back my loans, because I gave my word that I would.

That's the comparison I was using them for though- the city of Detroit gave their word to those workers that in lieu of more $$ on their paychecks that they'd instead defer some of that $$ into a retirement account for said workers to depend on in the future. Now, they're trying to back out of paying them $$ that was both promised and earned. That's just wrong, it's basically akin to Snyder's self-appointed EFM robbing all those people of a lot of $$...

Exactly and that promise was enshrined and guaranteed in the Michigan State constitution nearly 50 years ago. Now I know many of you guys are Michigan taxpayers... so am I, and probably don't want to hear this. But shouldn't the state have an obligation to see that its constitutional guarantees are upheld ? If not what good is having one ? You might as well just burn the damn thing. This isn't just a party issue either. The republicans currently in control have held both the governor's mansion and the state legislature for many of those years since that provision was passed. If they thought it was wrong, unwise or unfair they could have done something about it.

 

[tpaulus_2]

I agree that it's definitely not a party issue. Both parties have grossly mismanaged Detroit for a very long time...

 

[RobBase]

Now, they're trying to back out of paying them $$ that was both promised and earned. That's just wrong, it's basically akin to Snyder's self-appointed EFM robbing all those people of a lot of $$...

Where is the money supposed to come from? You can't steal what isn't there.

 

[RobBase]

I agree that it's definitely not a party issue. Both parties have grossly mismanaged Detroit for a very long time...

Only one party has been in charge of Detroit for the past 50 years. It's not a black eye on all unions or all socialism but it is a major black eye on the Democrats who have been killing Detroit for longer than we've been alive.

 

[themuzzer]

Where is the money supposed to come from? You can't steal what isn't there.

You havn't heard swarm. You just print more and then bury your head in the sand.

 

[themuzzer]

Only one party has been in charge of Detroit for the past 50 years. It's not a black eye on all unions or all socialism but it is a major black eye on the Democrats who have been killing Detroit for longer than we've been alive.

 

[tpaulus_2]

Where is the money supposed to come from? You can't steal what isn't there.

The money for that should be at the very top of the list when assets begin to get sold off.

 

[RobBase]

The money for that should be at the very top of the list when assets begin to get sold off.

If the money was there, it probably would be, but it probably won't be because it never was in the first place. Dan Gilbert is buying up all the top assets (buildings) in Detroit for less than half of their value (that's how foreclosures work) so the capital from selling off the assets is already cut in half. Half of nothing is not good!
They might get something, but it will be more of a compromise than a promise from crooks full filled.

 

[tpaulus_2]

There's further assets than just the infrastructure. Max mentioned the DIA collection, if the Michigan tax payers buy that out for even half value that's enough to cover the pensions right there.

It will come down to which creditors top the repayment list- some are definitely going to get stiffed since the balance of the debts roughly doubles Detroit's assets...

 

[Naughtymax]

Unfortunately I think the unfunded pension/health coverage liability is more like 8 billion. The DIA collection will help close that gap, and even if it weren't the city isn't going to emerge from bankruptcy scot-free on future pension obligations, but $2.5BB will probably at least close half that gap (assuming the judge rules pension obligations have primacy over bondholders and other creditors.

 

[RobBase]

For what it's worth I do not necessarily blame the union workers expecting what they were "promised". I blame the union leaders who negotiated these unrealistic deals in the first place which put everyone in a position to be disappointed once the smoke cleared.

 

[themuzzer]

For what it's worth I do not necessarily blame the union workers expecting what they were "promised". I blame the union leaders who negotiated these unrealistic deals in the first place which put everyone in a position to be disappointed once the smoke cleared.

Yup, and It's still going on today. If you work for a union and your young, Ya might want to rethink your future security.

I guess that's the lesson to be learned.

 

[Dr. Evil-er]

401k's are the biggest joke going along with college tuition.

Please explain this statement to me. That's a legit question, I'm not sure if you are serious here or not, especially the 401k part.

 

[themuzzer]

Please explain this statement to me. That's a legit question, I'm not sure if you are serious here or not, especially the 401k part.

If your drawing a 401k right now then your fine and it's not a joke. Much like Social Security your paying into something you expect to be there when your 67. In order for it to work you have to trust your company.

This is all opinion, I have no facts to back it up. It's still a system builit on trust. If I've learned one thing in life after 42 years is you don't trust anyone.

 

[Dr. Evil-er]

If your drawing a 401k right now then your fine and it's not a joke. Much like Social Security your paying into something you expect to be there when your 67. In order for it to work you have to trust your company.

A company bankruptcy can not affect your 401k. The $ in the 401k is yours and is 100% vested from the moment you put it in. Only matching portions from the employer may contain a vesting schedule where some of those dollars arent technically yours yet.

You are the owner of the account and the $ in it. Those funds are not a company asset. A third party administrator actually collects the contirbutions from you and your employer, invests it per your instructions, and does the record keeping and tax reporting. They are effectively holding your $.

A pension plan on the other hand is an obligation of the employer, there is no individual ownership of any funds. It's merely an implied promise to pay. Many are ultimately destined for trouble due to being underfunded. Much like social security the expectations upon payouts was thought to be a much, much shorter time frame than what is happening now.

The default of the social security program is inevitable. To many people collecting it not enough contributions going in. It should have been privatized years ago but of course the simple math of how easily you could fix it didnt work with the individual party agendas so nothing happened. I have said for many years that I will retire and spend out my days abroad. Until you abolish the two party system altogether Washington will never accomplish anything.

 

[themuzzer]

A company bankruptcy can not affect your 401k. The $ in the 401k is yours and is 100% vested from the moment you put it in. Only matching portions from the employer may contain a vesting schedule where some of those dollars arent technically yours yet.

You are the owner of the account and the $ in it. Those funds are not a company asset. A third party administrator actually collects the contirbutions from you and your employer, invests it per your instructions, and does the record keeping and tax reporting. They are effectively holding your $.

A pension plan on the other hand is an obligation of the employer, there is no individual ownership of any funds. It's merely an implied promise to pay. Many are ultimately destined for trouble due to being underfunded. Much like social security the expectations upon payouts was thought to be a much, much shorter time frame than what is happening now.

The default of the social security program is inevitable. To many people collecting it not enough contributions going in. It should have been privatized years ago but of course the simple math of how easily you could fix it didnt work with the individual party agendas so nothing happened. I have said for many years that I will retire and spend out my days abroad. Until you abolish the two party system altogether Washington will never accomplish anything.

I can get down with all that. Social Security was a great idea in theory when Roosevelt created it, much like unions was a great idea. The fact is When soldiers came home from World War II they knocked up women plenty. Hence the Baby Boomer generation. Now you have less people (tax payers) funding a lot of old people. The pyramid is upside down.

Back to the 401K. It's still based on trust between you, your company and where they put your money. That's way to much trust.

 

[Mebert]

401k is like a free raise if your company does matching. It is also not any different from trying to play the stock market, except that a hedge fund manager is choosing what to buy instead of you. Obviously if there is a huge down turn in the economy you will take a bath, but that is the risk of the market. You can see what the average rate of return is for your plan though and pretty much get around that.

Since I am not a believer that Social security will be here when I am ready to retire you have to prepare for retirement somehow. 401K is only real valuable if you start young or put a lot into it late.

 

[Dr. Evil-er]

Back to the 401K. It's still based on trust between you, your company and where they put your money. That's way to much trust.

You are mixing up 401k with pension or even a defined benefit plan. In a 401k your employer has nothing at all to do with your $. They have no claim to it, no access to it, and no effect on how or what it is invested in. I can assure you that there is no element of trust needed, it's yours and only yours. The pension is a completely separate type of plan with totally different risks.

Contribute every nickel you can into your 401k without worry.

 

[themuzzer]

401k is like a free raise if your company does matching. It is also not any different from trying to play the stock market, except that a hedge fund manager is choosing what to buy instead of you. Obviously if there is a huge down turn in the economy you will take a bath, but that is the risk of the market. You can see what the average rate of return is for your plan though and pretty much get around that.

Since I am not a believer that Social security will be here when I am ready to retire you have to prepare for retirement somehow. 401K is only real valuable if you start young or put a lot into it late.

Amen. I'm afraid young kids don't know this and Companies and Govt keep them in the dark in regards too both 401Ks and Social Security.