Detroit Bankruptcy “Offer” Is More Like a Threat!

Mar 3, 2014

Detroit’s emergency dictator Kevyn Orr released his “proposal” for solving the city’s bankruptcy. General city retirees would receive 74 percent of the pensions they were promised, under the plan. That’s if–and it’s a big if–they go along with Michigan Governor Rick Snyder’s proposal for the State of Michigan, the Detroit Institute of Arts (DIA), and charitable foundations to pitch in money to the pensions fund, and do so “in a timely manner.”

If they dare to resist and drag things out, Orr threatens they will only receive 68 percent of what they were expecting.

If they don’t knuckle under, we’re told, the city will be forced to sell off the DIA’s art collection to pay its debts, the water department will get a worse deal over its management from the suburbs, and the street lights will stay off for even longer. City residents will be deprived of billions and billions of dollars in city services.

Even if they do accept the plan, all it calls for is for the state and charitable foundations to put in about 700 million dollars. Street lights are out all over the city, and all residents are getting are promises from the new mayor, Mike Duggan, that the city will meet national lighting standards by the end of NEXT year. Meanwhile, the city is already in the process of cutting whole departments and farming out the work.

It’s part of a big game Orr, Snyder, and all the media pundits are playing to make people think city workers have to go along with this “Grand Bargain.”

According to them, city workers should be grateful; after all they are being offered “more” than the banks, since the pension fund would get 25 cents on the dollar for what it’s owed and the banks would “only” get 22 cents.

Poppycock! Comparing 24,000 pensioners to a small handful of huge banks is like comparing apples and oranges. City retirees worked for the city their whole lives and gave up wages to earn their pensions. They’re not making profits off of high-interest loans. Some of the banks, incidentally, are getting 100 percent of what the city “owes” them, because their debt is considered “secured.”

City retirees are being told to expect to live in poverty. As it is, their pension benefits are already a big reduction from what they were making while they were working.

Cuts to retiree pensions and cuts to city services are not the only two choices. The banks who benefitted from predatory lending and the corporations, stadium owners, and real estate developers who received huge tax breaks created the city’s financial crisis. Get the money from them!