|Numbers| Posted May 13, 2013 Report Share Posted May 13, 2013 http://www.detroitnews.com/article/20130512/METRO01/305130320/Detroit-insolvent-EM-Kevyn-Orr-says?odyssey=mod|breaking|text|FRONTPAGE Detroit insolvent, EM Kevyn Orr says Emergency Manager Kevyn Orr says the city of Detroit's cash-flow crisis makes it "insolvent" and unable to borrow more money to mask over debts being made worse by skipping millions in payments for retiree pensions and health care. After 45 days on the job, Orr's initial assessment of Detroit's perilous finances is laid bare in a 41-page report to be delivered today to state Treasurer Andy Dillon. Calling it "a sobering wake-up call about the dire financial straits the city of Detroit faces," Orr said he will use the report as a baseline for paring down the city's $15.6 billion in debt and long-term liabilities. Orr also says he will evaluate "options to reduce or eliminate certain health care costs for both active and retired employees" in light of a $5.7 billion unfunded health care benefit for 18,500 retired city workers and 10,000 active employees. Now, for a serious question. What was the auto bailout for ? To save jobs by saving the auto industry and as a side effect, saving a city. Detroit has been failing for quite some time. Well before Obama came in office. This is likely to cause some animosity with both sides of the fence. Both presidents have been involved in bailout money. Bush doled out 17 BILLION before leaving office. Obama continued this idea but added a twist and made the employees have a strike ban. Now, for the real questions... Has this idea of the bailout worked ? Can it have a positive spin by any side ? Link to comment Share on other sites More sharing options...
Justice Posted May 13, 2013 Report Share Posted May 13, 2013 sell the city to china..seriously..China was thinking about buying Toloedo and investing in it. Link to comment Share on other sites More sharing options...
Jamie_B Posted May 13, 2013 Report Share Posted May 13, 2013 sell the city to china..seriously..China was thinking about buying Toloedo and investing in it. Are you insane? You want to sell our city to a forigen country? Like one who isnt even completely our friend? Whose laws would they follow ours or China's? Holy shit. I wish I could give this post more than one neg rep. Link to comment Share on other sites More sharing options...
Khatmandude Posted May 13, 2013 Report Share Posted May 13, 2013 Just create more money out of thin air like has been the practice for 80 yrs now. I'm sure that'll keep working. Link to comment Share on other sites More sharing options...
Justice Posted May 13, 2013 Report Share Posted May 13, 2013 Are you insane? You want to sell our city to a forigen country? Like one who isnt even completely our friend? Whose laws would they follow ours or China's? Holy shit. I wish I could give this post more than one neg rep. Not insane..First off for some reason I can't copy and paste on my laptop..Second, there was an article about turning Detroit into a zombieland I am serious to make money..that is insane..There was talks about like renting Toledo to China so they can invest it did not go through...You could rent Detroit to China and let them rebuild the city..Nobody wants to live there and the problem has been there for a awhile..why not let China who has the fastest growing economy rebuild it.. Also, are the reason my neg rep is so high? lol Link to comment Share on other sites More sharing options...
Jamie_B Posted May 13, 2013 Report Share Posted May 13, 2013 Not insane..First off for some reason I can't copy and paste on my laptop..Second, there was an article about turning Detroit into a zombieland I am serious to make money..that is insane..There was talks about like renting Toledo to China so they can invest it did not go through...You could rent Detroit to China and let them rebuild the city..Nobody wants to live there and the problem has been there for a awhile..why not let China who has the fastest growing economy rebuild it.. Also, are the reason my neg rep is so high? lol Oh I dont know, because then you have an American city that doesnt belong to America anymore. Link to comment Share on other sites More sharing options...
Homer_Rice Posted May 13, 2013 Report Share Posted May 13, 2013 Urban renewal Japanese-style. http://www.youtube.com/watch?v=ln8-Y-fIbqM Link to comment Share on other sites More sharing options...
Jamie_B Posted May 13, 2013 Report Share Posted May 13, 2013 We could also do what Hamilton did post war, which has been the tradition of how we handle these things since the dawn of our country. They get money from DC (with obvious conditions on how to use it) Personally the idea that any part of our country is insolvent to me is absurd and is code for more austerity. Link to comment Share on other sites More sharing options...
The PatternMaster Posted May 13, 2013 Report Share Posted May 13, 2013 http://www.detroitnews.com/article/20130512/METRO01/305130320/Detroit-insolvent-EM-Kevyn-Orr-says?odyssey=mod|breaking|text|FRONTPAGE Now, for a serious question. What was the auto bailout for ? To save jobs by saving the auto industry and as a side effect, saving a city. Detroit has been failing for quite some time. Well before Obama came in office. This is likely to cause some animosity with both sides of the fence. Both presidents have been involved in bailout money. Bush doled out 17 BILLION before leaving office. Obama continued this idea but added a twist and made the employees have a strike ban. Now, for the real questions... Has this idea of the bailout worked ? Can it have a positive spin by any side ? The auto bailout was bigger than Detroit, many jobs in Ohio were saved because of the bailout and problems in Detroit are much more complex than the struggles of the auto industry. The city of Detroit suffered through mismanagement from a mayor who was indicted by Feds for RICO charges, amongst other things. As for the bailout, I believe it was a rushed, emotional response to huge problem that many people didn't truly understand at that time. However I feel like the government had to do something to show that they were trying to handle the situation, so they did. Doing something, albeit rushed, was better than do nothing letting the global economy collapse. The way the economy has rebounded in the past 3-5 years I think the bailouts have proven to have worked, companies like GM are still in business and the national unemployment rate is below 8%. Yes things are great, but they could be a hell of a lot worse if the government did bailout companies like AIG and GM. AIG insures many global companies, if they were allowed to fail like Lehman Bros. then the confidence in the global economy would've been shaken to it's core and we would've been in depression instead of recession, imo. GM is one of the largest employers in the country so having keeping them from going out of business was a win for the country, also GM has repaid the bailout plus interest, so it was a wise investment by the government to bailout GM. Link to comment Share on other sites More sharing options...
Jamie_B Posted May 13, 2013 Report Share Posted May 13, 2013 The problem with the bailouts is that it has only helped one segment of our society. We still have an unemployment, under-employment, and wage inequity problem. Link to comment Share on other sites More sharing options...
The PatternMaster Posted May 13, 2013 Report Share Posted May 13, 2013 The problem with the bailouts is that it has only helped one segment of our society. We still have an unemployment, under-employment, and wage inequity problem. yeah but at what levels, they are better now than what they were in 2009 and what they would've been if companies like AIG and GM were allowed to fail. There is no quick fix to the economy, it's going to take time to get things back to where they were before the recession started but a good indicator is the equity markets and the 3 biggest indexes(S&P, NASDAQ, Dow Jones) are all at or above the pre-recession levels. It may take some time for that good news to get to problems like unemployment, wage inequity, etc...however it's a positive sign that things are moving in the right direction. Also there is a responsibility on the American worker to have the skills to get the high paying jobs that exist in this country today, the job market has changed dramatically in the past 10-15 years and traditional jobs that many Americans were accustomed to are not available. If you want a high paying job then you have to have the skills and education to get these jobs, gone are days when a high school grad could get a job at a manufacturing plant and make enough money to afford a mortgage and support a family. If you want the finer things in life you have to be willing to work hard and go get it, even if that means going to college or getting a graduate degree. Link to comment Share on other sites More sharing options...
Justice Posted May 13, 2013 Report Share Posted May 13, 2013 Oh I dont know, because then you have an American city that doesnt belong to America anymore. Delphi-Isuzu remember that? If China would call our debt in we would be in huge trouble you know that..Why not let them invest in our poorly run cities to pay our debt back to them.. Link to comment Share on other sites More sharing options...
sois Posted May 13, 2013 Report Share Posted May 13, 2013 Personally the idea that any part of our country is insolvent to me is absurd and is code for more austerity. Austerity is h-moe, but there is a difference in austerity and re-evaluation of reckless spending. Lots of entities overcommited on pensions/retirement benefits. It's shitty, but it's also crippling because of miscalculation. It's a hard one to fix for sure. Link to comment Share on other sites More sharing options...
Jamie_B Posted May 13, 2013 Report Share Posted May 13, 2013 Delphi-Isuzu remember that? If China would call our debt in we would be in huge trouble you know that..Why not let them invest in our poorly run cities to pay our debt back to them.. No we would not be in trouble. Our debit is largely owed to ourselves, further if we wanted to pay China back we would only have to print more money as the "The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned." That doesnt even cover that China in no way would attempt to call in their debits as the sheer amount of crap we buy from them would get changed real quick when we started raising the tarrifs on their things brought into this country in order for us to pay that debt. Nor does any of this cover the father of Capitalism Adam Smith's point that no goverment has ever repaid it's debts. Link to comment Share on other sites More sharing options...
Jamie_B Posted May 13, 2013 Report Share Posted May 13, 2013 yeah but at what levels, they are better now than what they were in 2009 and what they would've been if companies like AIG and GM were allowed to fail. There is no quick fix to the economy, it's going to take time to get things back to where they were before the recession started but a good indicator is the equity markets and the 3 biggest indexes(S&P, NASDAQ, Dow Jones) are all at or above the pre-recession levels. It may take some time for that good news to get to problems like unemployment, wage inequity, etc...however it's a positive sign that things are moving in the right direction. Also there is a responsibility on the American worker to have the skills to get the high paying jobs that exist in this country today, the job market has changed dramatically in the past 10-15 years and traditional jobs that many Americans were accustomed to are not available. If you want a high paying job then you have to have the skills and education to get these jobs, gone are days when a high school grad could get a job at a manufacturing plant and make enough money to afford a mortgage and support a family. If you want the finer things in life you have to be willing to work hard and go get it, even if that means going to college or getting a graduate degree. I would suggest that the responsibility on the American Worker to update their skillset is indeed on them but also on the government too, as it is one of the very reasons the social saftey net exists. Link to comment Share on other sites More sharing options...
Jamie_B Posted May 13, 2013 Report Share Posted May 13, 2013 Austerity is h-moe, but there is a difference in austerity and re-evaluation of reckless spending. Lots of entities overcommited on pensions/retirement benefits. It's shitty, but it's also crippling because of miscalculation. It's a hard one to fix for sure. Austertiy isnt just h-moe, but it's been proven wrong. Link to comment Share on other sites More sharing options...
sois Posted May 13, 2013 Report Share Posted May 13, 2013 That's why it's hella gay. Link to comment Share on other sites More sharing options...
Jamie_B Posted May 13, 2013 Report Share Posted May 13, 2013 http://michael-hudson.com/2012/04/debts-that-cant-be-paid-wont-be/ Debts that can’t be paid, won’t be April 10, 2012 By Michael An excerpt from a paper published for the conference Paradigm Lost: Rethinking Economics and Politics. I am speaking to this paper in Berlin this week. The full paper can be downloaded from their website (PDF). A common denominator runs throughout recorded history: a rising proportion of debts cannot be paid. Adam Smith remarked that no government ever had repaid its debt, and today the same can be said of the overall volume of private-sector debt. One way or another, there will be defaults – unless debts are paid in an illusory fashion, simply by adding the interest charges onto the debt balance until the sums finally grow to so fictitious a magnitude that the illusion of viability has to be dropped. But freeing an economy from illusion may be a traumatic event. The great policy question therefore concerns just how the various types of debts won’t be paid. The choice is between forfeiting property to foreclosing creditors, or writing debts down at least to the ability to pay, and possibly all the way down to make a fresh start. Somebody must lose, and their loss will appear on the other side of the balance sheet as another party’s gain. Debtors lose when they have to forfeit their property or cut back other spending pay their debts. Creditors lose when the debts are written down or go bad. The balance of gains and losses in such foreclosures depends – in narrow accounting terms – on the value of collateral being transferred. But from an economy-wide perspective the resolution of a debt overhead needs to be looked at as a long-term dynamic. Any such analysis turns on the role of specific classes of debtors and creditors within the economy – the 99% and the 1%, the “real” economy and the financial sector. It is not simply a matter of what contracts say (“A debt is a debt, and all debts must be paid.”) The effect of debt on the economy’s overall cost structure is most important – including the international dimension cited earlier with regard to the extent to which debt service and debt-leveraged housing prices and other output increase the cost of living and doing business. Writing down debts reduces the overall economy’s financial costs. Keeping debts on the books retains these costs. So when the financial sector (or the 1%) insists on maintaining the debts that have been run up – and supporting the debt-leveraged price of real estate pledged as collateral – securing its past “savings” gains are incompatible with maintaining a viable economy. The debt overhead becomes an expense that must be shed if the economy is not to shrink – and if it does shrink, more debts will go bad and a deteriorating spiral will set in. Perception of this long-term macroeconomic dynamic is what has led the past few centuries of legal trends and political ideology to favor indebted labor and industry, and indebted governments as well. It explains why debtors’ prisons have been closed, and bankruptcy laws become increasingly humanitarian to enable debtors to make a fresh start. This idea of clean slates is only recently being extended to the economy-wide scale, starting with government debts to global creditors. Today’s financial trend threatens to reverse this pro-debtor reform tendency. Without acknowledging the economic and social consequences, the “business as usual” approach is a euphemism for sacrificing economies to creditors. It seeks to legitimize the disproportionate gains of banks and their rentier partners who have monopolized the past generation’s surplus. And it is to protect these accumulations that the FIRE sector has spent part of these gains to become the dominant voice in government, including the courts, as well as academia. The aim in practice is to impose austerity and economic shrinkage on the private sector, while the public sector sells off its assets in a voluntary pre-bankruptcy. The internal contradiction in this policy is that austerity makes the debts even harder to pay. A shrinking economy yields less tax revenue and has less ability to create a surplus out of which to pay creditors. Debt repayment is not available for spending on current goods and services. So markets shrink more. This is not an inevitable scenario. Governments are sovereign with regard to their creditors. They still posses the alternative power to wipe out the debts – along with the savings that are their counterpart on the opposite side of the balance sheet. The German Currency Reform of 1948 remains a model. But it calls for creditors to take a loss. This has happened again and again in history for the past five thousand years. Until recently it was the normal result of financial crashes – the final stage of the business cycle, so to speak. But as economies have been financialized, creditors have gained political power – and also the power to disable realistic academic discussion of the debt problem. What they fear most of all are thoughts of how to avoid today’s arrangements that have given them a free lunch at the rest of the economy’s expense. Link to comment Share on other sites More sharing options...
Jamie_B Posted May 13, 2013 Report Share Posted May 13, 2013 That's why it's hella gay. What bothers me about this is that the original paper went through the peer review process unscaithed. For anyone that knows how that stuff is supposed to work in acedemia that should be concerning. Link to comment Share on other sites More sharing options...
Justice Posted May 13, 2013 Report Share Posted May 13, 2013 http://michael-hudson.com/2012/04/debts-that-cant-be-paid-wont-be/ Great article..That sad the no country has paid back though but interesting read. Link to comment Share on other sites More sharing options...
Nati Ice Posted May 13, 2013 Report Share Posted May 13, 2013 Not insane..First off for some reason I can't copy and paste on my laptop..Second, there was an article about turning Detroit into a zombieland I am serious to make money..that is insane..There was talks about like renting Toledo to China so they can invest it did not go through...You could rent Detroit to China and let them rebuild the city..Nobody wants to live there and the problem has been there for a awhile..why not let China who has the fastest growing economy rebuild it.. Also, are the reason my neg rep is so high? lol What do you think about allowing a humanoid ex-cop to run roughshod over this area? Link to comment Share on other sites More sharing options...
sois Posted May 13, 2013 Report Share Posted May 13, 2013 What do you think about allowing a humanoid ex-cop to run roughshod over this area? I'd buy that for a doll-... nah, I'll save that $ cause of austerity. Link to comment Share on other sites More sharing options...
Justice Posted May 13, 2013 Report Share Posted May 13, 2013 What do you think about allowing a humanoid ex-cop to run roughshod over this area? sell Detroit and humanoid ex-cop to china! Link to comment Share on other sites More sharing options...
Jamie_B Posted May 13, 2013 Report Share Posted May 13, 2013 sell Detroit and humanoid ex-cop to china! Can we sell you to china? Link to comment Share on other sites More sharing options...
Nati Ice Posted May 13, 2013 Report Share Posted May 13, 2013 sell Detroit and humanoid ex-cop to china! Why? No offense, but a humanoid ex-cop would lower law enforcement operating costs in Detroit. Thus helping to push the city back towards solvency. Link to comment Share on other sites More sharing options...
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