The Progressive Milieu reaches it’s terminus.
You must be cognizant of one very large gorilla in the room. The Liberals/Democrats/Progressives held the power controls in Detroit since the end of WWII. They are the golem behind the curtain polling the levers, telling you how wonderful they are.
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, a Washington, D.C., bankruptcy attorney, did not use the word “bankruptcy” anywhere in his report but said the city is “insolvent” and has “effectively exhausted its ability to borrow” after years of issuing long-term debt to pay its bills. Previously, he has said he hopes to avoid a Chapter 9 filing. [snip]
Despite budget cuts adopted by the City Council and Bing before his appointment, Orr said the city’s $326 million deficit is expected to grow by $60 million before the fiscal year ends June 30. When another $70 million in borrowing is accounted for, the city’s deficit is at least $456 million, Orr spokesman Bill Nowling said.
“In other words, Detroit spends more than it takes in — it is clearly insolvent on a cash flow basis,” Orr wrote in the report. [snip]
As part of the deficit, Orr counts $226 million in accounting gimmicks and delayed payments owed to vendors and the city’s pension funds. Detroit is paying just $31 million of a required $139 million payment toward its pensions this fiscal year, Orr said.
For the first time, Orr raised questions in the report about how well-funded Detroit’s two city employee pensions systems really are.
The Detroit General Retirement System and Police & Fire Retirement System claim to have been 83 and 100 percent funded, respectively, as of June 2011. But Orr and a team of consultants aiding the restructuring of city government are beginning to question mathematical assumptions used to determine the value of the funds. [snip]
Orr could argue in federal bankruptcy court that public employee pensioners in Michigan are constitutionally guaranteed to get paid before other debtors.
“If he takes that position, the problem with taking it is he can’t afford to pay it,” Bernstein said. “It’s simply an obligation that’s unsustainable.”
Retiree health care benefits aren’t constitutionally protected and could be wiped out by the emergency manager, Bernstein said. [snip]
Attention to this is crucial since cities such as Chicago, Philadelphia, Providence face very similar troubles. Follow this with states like CA, MI, IL and RI hold hands in those same turbulent waters.
Detroit’s population is now at 1910 levels (about 700,000), unemployment at 17%. That limits the ability to tax for some deficit relief.
If one thinks that Detroit can recover, please share some of your hallucinatory drugs with the rest of us. Now realize that the Poobahs in Congress and the Administration have practiced this insane form of economics since the Depression. FDR started it, Reagan only slowed it, and Obama outdid every President COMBINED.
How do you like your America looking like Detroit. Wait one year for ObamaCare to rip the economy apart. You’ll be astounded and amazed. Step right up, get your thicket.
Filed under: Government | Tagged: Idiots, Liberalism, Progressives/Socialists, Socialists | 1 Comment »