That gurgling sound you are hearing

is what is left of Detroit circling the drain.
http://www.nbcnews.com/business/insolvent-detroit-can-proceed-bankruptcy-judge-rules-2D11687462

This is the model for Obama's America.

That was the correct decision. Unfortunately there's no way to sue the US government and get the same results.

Proof that sooner or later, you DO run out of other people's money.

A concept completely lost to our government.

It's a shame, I feel bad for the working people of Detroit. The city has a long history of commerce and trade.

Yep, unfortunately there'll probably be more cities jumping on the default bandwagon. It was another out of control bubble.

They say there'll also be a default on city bonds that'll ripple through what originally were thought to be safe pension plan investments, 401k's... I'd think Insurance companies will be heavily hit by this mess.

They say Detroit pension plans might be 16 cents on the dollar. What was a $50k/yr pension might only be $8k. It's very hard to live on that.

The US government's Pension Benefit Guarantee Corp has no plan to prop up Detroit's pensions.

http://www.freep.com/article/20130627/COL07/306270021/

Diseasel wrote:

What was a $50k/yr pension might only be $8k. It's very hard to live on that.

$8K would be tough to live on but the $50K is pretty high.
We are from Michigan and there are small towns that are paying over $100K in pensions to people who never made that much in any working year. For comparison the "over paid" autoworkers get around $36K in pensions.

Detroit is just setting the precedent, there is more to come.

If I retire right now, my pension would only be $750 month. I'm going to have to work at least 5 more years to bring it up and hope social security is still around.

Many municipality employee pensions are quite high.  California cites many examples were pension levels are set at 90% of the highest salary earned in a year.  There are many examples of pensions being $90k and even six figures annually.  Firefighters, police, city mangers, you name it.

This simply isn't sustainable.

I believe it was Los Angeles that has 62 cents of every tax dollar goes to employees, benefits, and pensions.  This is the reason we get so little in public assets or infrastructure for our local taxes, it's simply not sustainable.

My dad's pension is $150 a month, from the pubic sector. Mine? I don't get one. My retirement is on me and SS if it's still around.

And then there's lots of pension plan perversion. Phoenix had ridiculously generous pension plans especially for fire and police. Toward the end of their careers police and firemen could inflate annual salaries by working OT, selling PTO, tuition reimbursement, etc so their pensions were far more than they ever made in reality. The city changed the law recently but only for new employees. I wouldn't be surprised if Detroit had a similar pension plan perversion.

Same scheme was in effect in California from what I remember reading. Doing the same thing. Stacking up OT, vacation, to blow out the evaluation period and garner a huge full pension after working like 20 years.

Diseasel wrote:

And then there's lots of pension plan perversion. Phoenix had ridiculously generous pension plans especially for fire and police. Toward the end of their careers police and firemen could inflate annual salaries by working OT, selling PTO, tuition reimbursement, etc so their pensions were far more than they ever made in reality. The city changed the law recently but only for new employees. I wouldn't be surprised if Detroit had a similar pension plan perversion.

That is exactly what has happened in many Michigan cities. While stacking all those benefits in the last year and grossly inflating that years pay is how they end up with a pension exceeding any previous amount.

As joemac stated, it CAN NOT be sustained.
Simple math people. It is both the unions AND elected officials fault. In many cases those in charge have family/friends working in the hourly departments.

And with huge numbers of city workers, re-election was a cinch if you supported liberal pension laws. Unfortunately, the system was broken again and the fox was guarding the henhouse.

Public Sector Unions have stolen more tax dollars than the Pentagon.

Chicago is hoping to trim pensions next. If it fails they might have to increase property taxes by 35% and Chicago area property taxes are already crazy. My father in law's Arlington Height's home is already 4x higher percent property tax than what I pay in Scottsdale.

http://www.cnbc.com/id/101248535

Illinois is $100 billion in the pension hole. They just passed law in hope of changing that. There's hope some will walk away from the pension system and to a 401k system like the rest of us.

http://www.nytimes.com/2013/12/04/us/politics/illinois-legislature-approves-benefit-cuts-in-troubled-pension-system.html?ref=us&_r=0

pup wrote:

Public Sector Unions have stolen more tax dollars than the Pentagon.

And that's saying something given that the pentagon has been a ridiculously long term public works program.

pup wrote:

Public Sector Unions have stolen more tax dollars than the Pentagon.

Well that might be a good competition.  

On the federal level we only bring in enough money annually to pay for the welfare or the warfare, but not both.  

The sad part is that these people can't see the writing on the wall.  The really sad part is that there are many good people that are going to get screwed by this inevitable collapse without any backstop.  This is all brought on by those in the middle of the night behind closed doors voting in salaries and benefit increases that simply aren't sustainable.

It's the same mentality over and over.  Mortgage the future to fulfill my needs now.  Greed, greed, piled on top of greed void of common sense or any thought of fiduciary responsibility.

Our pension is based on the last 3 years of work. You can get a pension after 10 years but it doesn't add up to much. I need to work another 5 years to get around 1K per month. All the higher ups get a big raise their last 3 years. 30 years in the system and you can retire with benefits.

My wife went back to work for the state; she makes at least 10% less but the hours are better for raising a family. Currently has about 10yrs in. There's plenty of time to decide whether to gamble on the underfunded AZ state pension.

Looks like the baby boomer generation will be leaving scraps and big bills once again for the rest of us. Some of the late boomers will get a reality check too.

I'm looking to get out of government work, but I get 4 weeks vacation, 14 holidays, 3 personal days and 12 sick days. Kinda hard to just walk away but the work sucks.

TheQuig wrote:

I'm looking to get out of government work, but I get 4 weeks vacation, 14 holidays, 3 personal days and 12 sick days. Kinda hard to just walk away but the work sucks.

That is usually how it goes, crappy work with decent benefits or good work crappy benefits.

TheQuig wrote:

I'm looking to get out of government work, but I get 4 weeks vacation, 14 holidays, 3 personal days and 12 sick days. Kinda hard to just walk away but the work sucks.

That would be hard to give up.  Certain factors into the entire equation. With the continual lies about our economies recovery having something secure that won't founder if we take a nominal hit is something that certain has value.

Comparison my private sector at 5-10 years of service is 3 weeks vacation, 8 holidays, 3 floating and, 5 combined personal/floating holidays.  31 Days total.

Gotta wonder how long before Detroit pensioners take to the street to loot and rampage. I wouldn't want to live or travel anywhere near there.

Is there anything left there to loot? Only like what 20% of the street lights work there. Copper been stripped out of most everything.

What a sh!t hole. If Ford, GM, and Chrysler could get out of there I imagine they would prefer too.

joemac wrote:

.  If Ford, GM, and Chrysler could get out of there I imagine they would prefer too.

GM tried to but ...

"The Obama administration in 2009 vetoed GM’s plan to move corporate headquarters to Warren from Detroit ..." http://www.detroitnews.com/article/20131121/AUTO0103/311210086

The move made sense financially (sell Renaissance Center, pocket the proceeds, and move HQ to the Tech Center) but making sense is NOT something this administration is known for.

more of that gurgling sound ...