Dec 9, 2013
U.S. Bankruptcy Judge Steven Rhodes decided Detroit is eligible for Chapter 9 bankruptcy. With the stroke of a pen, he dismissed pension protections in the Michigan state constitution, saying such protections are “contracts” that can be thrown out in a federal bankruptcy court.
He accepted as true that Emergency Manager Kevyn Orr failed to properly negotiate with the unions, as is supposedly required under bankruptcy law, but he ruled it didn’t matter because good faith negotiations would have been “impracticable.”
In his ruling, the judge repeated all the conventional lies about city worker pensions and retiree health care causing a huge debt load.
Retiree pensions and medical coverage are long-term debts. They are not due today but rather are owed more than 30 years or more. The big figures adding up to 18 billion dollars were misrepresentations, meant to throw dust in everyone’s eyes.
In fact, Detroit is in bankruptcy only because it ran out of short-term revenue to pay its bills. The hidden truth is that the city has a cash flow shortfall of no more than 198 million dollars a year, according to Wallace Turbeville, a former investment banker from Goldman Sachs, who has meticulously researched the city’s finances.
And that shortfall could easily be covered. The list is long of how politicians slashed the income needed by the city. Detroit loses 20 million dollars a year because of all the tax abatements given to big companies like GM and Compuware and wealthy “developers” like Dan Gilbert, Mike Ilitch and Bill Ford, Jr.
Whatever tax money these companies do pay doesn’t go to the city, it goes to the Downtown Development Authority, which then hands it back to business!
Detroit was denied almost 43 million dollars every year due to cutbacks in state revenue sharing, a conscious decision made by the Republican-controlled state legislature and governor.
Detroit was denied about 80 million dollars a year from cutbacks in federal revenue sharing, a conscious decision made by the Democratic Obama administration.
Detroit lost untold millions in tax revenue from the sub-prime mortgage real estate scam run by some of the biggest banks in the country. As a result, many Detroiters lost their homes and whole neighborhoods were decimated.
Detroit had to pay almost a billion dollars in fees and penalties on its debt as a result of a financial scam run by some of the biggest schemers on Wall Street.
The so-called leaders of the city and the governor now demand that city workers lose their pensions and their medical coverage to make up for shortages in funding and accumulated debt their policies caused. And they are proposing to spin off revenue-producing departments like the Department of Water and Sewage and the Public Lighting Department.
The corporations caused the budget shortfall, and now they are using it to attack Detroiters even more. End all the handouts to corporations. Make them pay!