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Yes, we all know the economic and social ruin that is now Detroit. 50 years of voting Democrat finally washed up against reality and it declared itself bankrupt. But that is only the start of what lies in store…let me explain;

At the heart of Detroit’s problem is a growing unfunded debt on benefits owed to current and future retirees — some $3.5 billion, according to its emergency manager, Kevyn Orr — which mirrors a circumstance being seen across the U.S.

But if you think that is worrying…

For years, watchdog groups and public-sector analysts have warned of the threat posed by unfunded liabilities. Much like the legacy pension costs that weighed on Detroit’s automakers before the Chrysler and General Motors restructurings of 2009, the worry is that revenues can’t keep up with growing debt and that rosy predictions for market returns downplay the actual financial risk. As examples of the results: Chicago recently saw its credit rating downgraded because of a $19-billion unfunded pension liability that the ratings service Moody’s puts closer to $36 billion. And Los Angeles could be facing a liability of more than $30 billion, by some estimates.

The problem with socialism, as Thatcher once observed, is that eventually runs out of other people’s money to spend.  The brutal truth is that these cities are seeking to fund public liabilities without the cash required and just as in Detriot, sooner or later, reality will get in the way of such utopian delusionalism.

Final point.  US debt per person is TWICE that of Detroit. Obama, you have a REAL problem but your Party and your cities seek to deny it in a way that will NOT end well. Unless you believe in these…

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4 thoughts on “YOU THINK DETROIT IS A PROBLEM?

  1. “At the heart of Detroit’s problem is a growing unfunded debt on benefits owed to current and future retirees — some $3.5 billion, according to its emergency manager, Kevyn Orr — which mirrors a circumstance being seen across the U.S.”

    And the rest – it’s $9 billion just for current retirees from government. It’s meant that more and more had to be collected, and that ever greater proprtions of it had to be directed to pensions instead of services.

    All of which is pure government economics. Employees never had a portion of their salary put aside for pensions. There was never a provision made. It was all spent at the time so today’s tax-victims pay that part of the salary, which was apparently funded years ago by tax then.

    This is fraud, this is government accounting. If a firm operated like this the officers would be guilty of fraud, but government allows itself to operate by different standards, of course.

    The entirety of the US government system is in an even worse state. There’s no social security pot. It’s a myth. There’s not a dime in it. Future tax-victims will be robbed of more and more to fund the pensions of today’s parasites, until they have enough of it.

    The productive upped and left Detroit in the end. One day they’ll up and leave whole states and then the country.

  2. My specialism is in strategic risk management. It is part of the training I do to point out that for every major disaster – environmental, organisational etc, there will have been signs and often people actually warning about what might happen and being ignored.

  3. The geeater per capita debt pp between the US and Detroit is a mere talking point.

    The US is a big country with a productive economy. The US debt can easily be financed by the US economic machine.

    Detroit is a depopulated, ruined, dangerous place that people are agraid to set foot in. Economics is only one of its many issues. If its debt were paid off tonight, very little would change. He unions and bondholders would be better off, but the city would remain ruined.

  4. Course Republican controlled states like Mississippi and Alabama vie for the bottom of the economic pile. It is too simplistic in reality to attribute a major City or even a State’s decline to one factor – there are too many.

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