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Detroit's workers and retirees are no longer just fighting the emergency manager over their pensions - they're fighting each other. Fox 2's Charlie LeDuff explains the two Detroit pension funds: one for police and fire and the other for other city employees such as secretaries and janitors (known as the General Retirement System). City workers explain why they don't want to be lumped in the same pension category.

Officially, the City of Detroit is the largest municipality in U.S. history to enter Chapter 9 bankruptcy.

Local Media is covering it on TV and Radio, the Judge is laying out the potential reasons for, local TV people noting what is going on, the Court is not live if you will, data must be coming to them via text etc...

[...] What is being overlooked is the new and higher deductibles and total annual out-of-pocket expenditures, especially in the Bronze and Silver plans. The amount of these greatly exceeds the ability of most individuals and families to pay, thus providing the real possibility of personal bankruptcies due to medical bills and high losses for providers who cannot collect. [...] So what will happen? The family, being responsible citizens, will initially try to pay the bills, but that will soon prove impossible. They will ultimately default. And in any case, they will most likely end any college planning or retirement savings...

The U.S. Treasury Department said it expected to sell its remaining shares of General Motors by the end of the year, a plan that may leave taxpayers with a shortfall of about $10 billion on the automaker’s 2009 bailout. It must be nice to be bailed out by Uncle Sam. Most companies go through the bankruptcy process without the Federal government interfering with the proceedings. But what about Fannie Mae and Freddie Mac, the beleaguered mortgage giants held in conservatorship by the Federal Housing Finance Agency (FHFA)? More to the point, why didn’t the failed giants go into bankruptcy instead?...

Back in July, the city of Detroit filed for the largest municipal bankruptcy in United States’ history, with the city owing more than $18 billion in debt and liabilities following decades of purely blue leadership. The city’s appointed financial managers have already gotten to work on digging the city out of the massive hole into which it dug itself over the years, but not without the requisite challenges and lawsuits from unions and pension funds irate about the major losses that are going to be foisted upon everyone involved — and all of the work the city has done so...

Scranton could be headed towards another fiscal crisis like the one that resulted in city workers having their pay cut to minimum wage in 2012... Moody’s warned investors that Scranton could be facing the threat of default or bankruptcy thanks to a $20 million budget gap for the fiscal year that begins Jan. 1. The city is supposed to approve a new budget by Nov. 15, which would have to close that deficit to balance the budget. ... A similar crisis hit the city in July 2012, which lead to Mayor Chris Doherty cutting all city workers’ pay to minimum...

Desert Hot Springs, the resort town near Palm Springs, may become the first city since Detroit to seek bankruptcy protection from creditors ... Chapter 9, it would be the fourth California city since June last year to do so.

Outgoing Detroit Mayor Dave Bing says the once-thriving automotive capital of the world had no choice but to file for bankruptcy after it “hit bottom,” buried by high pension and health care obligations and millions of dollars in bond debt. But Bing told The Associated Press that while he anticipated the decision to make Detroit the largest city in U.S. history to seek bankruptcy protection, he remains convinced the state could have done more to help Detroit avoid it. … (Michigan Gov. Rick) Snyder’s office says the governor and legislators have found ways—outside of a state bailout—to help Detroit. These...

Bill de Blasio overwhelmingly was elected mayor here Tuesday, becoming the first Democrat to lead New York in 20 years and ushering in an era of activist liberal governance in the nation’s largest city. In early returns Tuesday night, de Blasio was soundly defeating Republican Joe Lhota, a protégé of former mayor Rudy Giuliani. De Blasio campaigned on a mantle of progressive change following Mayor Michael R. Bloomberg’s 12 years in office, highlighting what he saw as “a tale of two cities.” The moneyed Manhattan elite have had their mayor, he argued, and now the 46 percent of New Yorkers...

Editor's Note: This column was co-authored by Prof. Richard Vedder, the Distinguished Professor of Economics Emeritus at Ohio University. Cincinnati and Detroit are separated by barely more than 250 miles – a five-hour drive at worst, or under an hour by plane. Despite this proximity, many Cincinnatians would prefer to believe that Detroit’s horrendous fiscal situation couldn’t possibly hit their city. Not so fast. As the largest bankrupt city in America, Detroit has seen its population drop by more than half, unemployment soar to well over double the national average, and services decline. This is what happens to a locality...

Detroit Emergency Manager Kevyn Orr said Tuesday he could force a legally binding settlement on the city's creditors if they were unwilling to accept a proposed restructuring plan in bankruptcy court. The "cram down" provision of federal bankruptcy law allows a judge to approve a plan of restructuring over the objections of creditors, so long as at least one impaired class of creditors votes to confirm it.

Reuters may get the award for the worst headline of the year. “Detroit pension cuts ‘function of mathematics’ -investment banker.” It just told me that Detroit pensions would be cut. But what you learn later in the article is pretty shocking: “Buckfire, a Detroit native and investment banker with restructuring experience, later told the court the city plans to pay unsecured creditors, including the city’s pensioners, 16 cents on the dollar. There are about 23,500 city retirees.” 16 cents on the dollar? Quite a haircut! Well, that is what happens when municipal government spends too much money (inefficiently) and suffers...

**SNIP** Nonetheless, unions and pension funds are challenging Detroit on the eligibility question. They claim emergency manager Kevyn Orr, who acquired nearly unfettered control over city finances following his appointment by Michigan Gov. Rick Snyder, was not genuinely interested in negotiating when they met with his team in June and July. Orr insists pension funds are short $3.5 billion and health coverage also needs to be overhauled. Evidence will show that Orr “planned to file bankruptcy long before the purported negotiations had run their course, confirming that the ‘negotiations’ were no more than a check-the-box exercise on the way to...

Thousands of Detroit streetlights are dark. Many more residents have fled. Donors are replacing ambulances that limped around for 200,000 miles. Millions in debt payments have been skipped. Is there really any doubt the city is broke? A judge starts exploring that question Wednesday in an unusual trial to determine whether Detroit indeed is eligible to scrub its books in the largest public bankruptcy in U.S. history. Unions and pension funds are claiming the city failed to negotiate in good faith before filing for Chapter 9 protection in July. …

Another sign of the tough times in Washington these days, the White House Gift Shop, long run by a nonprofit group that helps uniformed Secret Service officers and their families, has gone broke.The Secret Service Uniformed Division Benefit Fund, which traces its roots to the 1940s and for years did business as the official White House Gift Shop, lists more than $600,000 in liabilities in a pending bankruptcy petition in Washington. The fund — which operated independently of the White House and Secret Service, and was not a part of the government — disclosed tens of thousands of dollars in...

After the housing crash of 2008, millions of US borrowers were suddenly plunged into a negative equity position of their homes where the amount they owed to lenders exceeded the value of the property. The problem was so bad that it has motivated cities to consider eminent domain to seize the underwater debt of borrowers (as in Richmond and San Bernardino California). Here is a recent map of negative equity from Zillow. zillowmapofnegeq These borrowers have nothing on Uncle Sam. Uncle Sam now owes $17 trillion to bondholders. GFDEBTN_Max_630_378 (3) Currently, Uncle Sam has public debt equal to 100.46% of...

Have you ever noticed how often cities where there are very few Republicans elect Republican mayors anyway? Or if they don't elect a Republican, they elect a Democrat who acts like a Republican. New York City is known for being a bastion of liberalism. But the city hasn't had a real liberal mayor for almost 40 years. When Jersey City, New Jersey, elected Republican Bret Schundler as mayor, there probably weren't more than five Republicans living in the whole city. Democrats have outnumbered Republicans in Dallas County, where I live, for quite some time. Yet Dallas has never really had...

New York City Opera said Tuesday it is shutting down and filing for bankruptcy protection after seven decades as a fixture on the metropolitan cultural scene. The company announced Sept. 12 that it needed to raise $7 million by the end of September. Spokeswoman Risa Heller said about $2 million had been raised, plus another $301,019 was pledged from 2,108 donors in an online campaign. … Junior to and often feistier than the Metropolitan Opera, City Opera was a spawning ground for top opera talent that included Beverly Sills, Placido Domingo, Renee Fleming and Samuel Ramey. But it was derailed...

State-appointed emergency manager Kevyn Orr wants to overhaul Detroit’s two pension systems by shutting out new workers and freezing benefits for current members. … In July, Orr made Detroit the largest U.S. city to file for bankruptcy protection. …

<p>Now that "bail-ins" have become accepted practice all over the planet, no bank account and no pension fund will ever be 100% safe again. In fact, Cyprus-style wealth confiscation is already starting to happen all around the world. As you will read about below, private pension funds were just raided by the government in Poland, and a "bail-in" is being organized for one of the largest banks in Italy. Unfortunately, this is just the beginning. The precedent that was set in Cyprus is being used as a template for establishing bail-in procedures in New Zealand, Canada and all over Europe. It is only a matter of time before we see this exact same type of thing happen in the United States as well. From now on, anyone that keeps a large amount of money in any single bank account or retirement fund is being incredibly foolish.</p>

Detroit is famous for the largest municipal bankruptcy case in the United States. But despite their fiscal woes, Detroit house prices are growing at a faster rate than Los Angeles! detla092413 And if we compare Detroit to Las Vegas, Detroit house prices are REALLY booming! splvdet Las Vegas and Detroit have the following attribute in common: both have gambling. But for Detroit, the gambling revenues are a target for creditors. The cash that the city and Syncora Guarantee (Detroit’s insurer) are fighting over comes from an unlikely source: gambling. Like many states and cities looking for additional cash in recent...

Scranton's police and fire unions have received a judgment against the city for the overdue $21 million that the city owes the unions from a landmark arbitration ruling. The money was due July 2, but the city has not yet paid and is still seeking borrowing or selling an asset to honor the bill, Mayor Chris Doherty said. But the judgment means the unions now can seize city assets and sell them to collect what is owed, said city solicitor Paul Kelly and the unions' attorney, Thomas Jennings. "Whenever a judgment is granted, you can go to the sheriff and...

IN THE 1983 movie Dr. Detroit, the flamboyant lead character goes on a rampage warning of trouble to come. “I am talking about scorched earth, no survival, wholesale destruction…body-bags and fire!” he yells. That’s pretty much what has happened to Detroit over the last three decades. Its population has shrunk by half to below 700,000. The wait for police response is five times the national average, and only 8 percent of crimes are solved. Roughly a third of the city’s 140 square miles is either unoccupied or dilapidated. About 40 percent of its tax revenue is directed to retirement or...

The toll-road authority of Orange County, Calif., is nearing the biggest municipal default since Detroit's record bankruptcy ... The Foothill-Eastern Transportation Corridor Agency... risks default on $2.4 billion in debt, according to a consultant to the Debt and Investment Advisory Commission of California Treasurer Bill Lockyer.

The East Bay's most populous fire district is going broke. As Contra Costa County Administrator David Twa put it, without changes or more money, the district will be bankrupt in 2016. This is not, as some union leaders and at least one county supervisor claim, a revenue problem. This is primarily an expenditure problem -- specifically, a pension problem. To be sure, the Contra Costa County Fire Protection, which relies almost exclusively on property tax revenue, suffered from the real estate downturn of the Great Recession. But if one looks at the other side of the ledger, a bigger problem...

LOS ANGELES — A federal bankruptcy court judge granted the city of San Bernardino eligibility for bankruptcy protection Wednesday, raising the possibility that the city will propose a plan to dig itself out of debt by cutting money promised to the public pension system. The ruling by Judge Meredith Jury came despite opposition from the powerful California Public Employees’ Retirement System, more commonly known as CalPERS. San Bernardino, a working-class city of 240,000 about 60 miles east of Los Angeles, declared Chapter 9 bankruptcy last summer, saying it had effectively run out of money to pay for day-to-day operations, in...

SAN JOSE -- A Modesto contractor awarded an $11 million contract to build a San Jose environmental center despite finishing two city fire stations late has walked off the job and filed for bankruptcy with the unfinished project more than six months overdue and $1.6 million over budget. Applegate Johnston's team failed to show up at the Las Plumas Avenue job site last month and filed bankruptcy papers two weeks later, jeopardizing the project's completion and complex financing and forcing the city this week to delay occupancy of a key tenant until next year. City officials said the deadlines to...

In the industrial midwest, the city government of Detroit went into bankruptcy in July. Out in California, the city governments of Stockton and San Bernardino entered bankruptcy proceedings in 2012. But the Detroit and California bankruptcies, like Tolstoy’s unhappy families, are not alike. They suffer from quite different ailments. You can see the difference by comparing their populations in the 1950 and 2010 censuses. In 1950, Detroit – then the nation’s fifth-largest city – had 1,849,568 people. In 2010, it had 713,777. Stockton and San Bernardino were not much more than small towns in 1950, with 70,853 and 63,058, respectively....

Much has been said about why Detroit lies in critical condition, but one serious wound has been festering for decades: the unsustainable pension and health benefits that were secured for city employees by self-serving union bosses and their political collaborators. These irresponsible promises constitute $11 billion of the once-great Motor City’s $20 billion in debt. It’s a timely lesson in government guarantees gone wrong, yet it seems that few onlookers are taking notes. States and cities across the country face similar challenges and, should they choose to do nothing, may meet a fate like Detroit’s. My home state of Pennsylvania...

Parts of Northern Europe have had a bit better luck than some other sectors across the pond during the economic troubles of the past decade, but they still have had to deal with the legacy of welfare states and costly entitlement programs. Earlier this year, Mary Katharine looked at Sweden’s attempts to deal with rising debt and costly entitlements, while Erika covered some steps being taken in Denmark to deal with their long term financial issues arising from the same core issues. This sense of realism and worry about the future seems to be spreading across the region, and John...

AMES, Iowa — Texas Sen. Ted Cruz is the subject of endless 2016 presidential speculation, and if he does decide to run, he’s already learned one important lesson. “You all had the opportunity earlier this afternoon to get to know my father. And as you saw, my dad is very soft spoken,” Cruz joked during a speech in Iowa this weekend. “I will confess, I am today violating what has been a cardinal rule, which is never, ever, ever follow my father at the podium.” Cruz and his father, Rafael, a Texas pastor, both addressed a gathering of Christian conservatives...

NEW YORK – Chicago, America’s third largest city, could follow Detroit into bankruptcy, warned Mayor Rahm Emanuel in the city’s “Annual Financial Analysis 2013” released last week. “Until we pass meaningful pension reforms in Springfield, the outlook for future years is unsustainable,” Emanuel concluded bluntly, anticipating a current budget crisis that could develop into a full-fledged budget meltdown within the next four years.Emanuel noted that Chicago’s current budget deficit of $338.7 million is expected to grow to $1.6 billion by 2016, due largely “to ballooning obligations under current pension legislation.”Compounding the fact that pensions for public employees are less than...

After Detroit filed bankruptcy two weeks ago, the attention turned to America's other financially distraught cities. Think Motown is the only major U.S. city in a boatload of financial trouble? Think again. Detroit's bankruptcy filing sent shivers down the spine of municipal bondholders, government employees, and big-city urban residents all over the country. That's because many of the 61 largest U.S. cities are plagued with the same kinds of retirement legacy costs that sent Detroit into Chapter 9 bankruptcy this summer. These cities have amassed $118 billion in unfunded healthcare liabilities. These are legal promises to pay healthcare benefits...

The primary myth being perpetuated by the Central Banks of the world is the belief that loose monetary policy and money printing will lead to economic growth. This is the reason why Central banks have cut interest rates more than 511 times since June 2007. It’s also why they’ve expanded their balance sheets by over $10 trillion (this doesn’t count unofficial lending windows and off balance sheet programs). It’s a strange idea, especially when you consider that there is literally no evidence that printing money creates jobs. Look at Japan, they have and continue to maintain QE efforts equal to...

Detroit, you're not alone. Across the nation, cities and states are watching Detroit's largest-ever municipal bankruptcy filing with fear. Years of underfunded retirement promises to public sector workers, which helped lay Detroit low, could plunge them into a similar financial hole. A CNBC.com analysis of more than 120 of the nation's largest state and local pension plans finds they face a wide range of financial burdens as aging work forces near retirement. Thanks to a patchwork of accounting practices and rosy investment assumptions, it's not even clear just how big a financial hole many states and cities have dug for...

Which city will be the next to suffer the fate of Detroit (bankruptcy, alarming crime rate, exceptionally low property value, etc.)? What's your reasoning behind the city you picked?

Robert B. Reich, the little man with big liberal ideas, has a big idea for bailing out Detroit. It's a simple big idea, which just goes to show Reich's genius. Great thinkers get to the nub of things. In a nutshell, Reich wants to make things right in Detroit by expanding its boundaries. Or does he want to expand the burbs' boundaries to encompass Detroit? Doesn't matter, really. The key to Reich's ingenious plan is for miserably failed Detroit to glom onto the burbs for resources -- that would be money, in plain English. But let's permit the Master, via...

Chicago — Having just been downgraded three notches by Moody’s, Chicago is suddenly hearing the uncomfortable shifting of deck chairs, as people wonder if the nation’s third-largest city is about to slam into the same debt-and-pensions iceberg that sank the SS Detroit last month. It was once inconceivable that the Motor City would become the setting for post-apocalyptic visions of burned out, abandoned neighborhoods, a corrupt and incarcerated city government, and all-but-nonexistent public services. Yet Detroit’s collapse took but a few decades. Now, the same disbelief and denial about Chicago is being heard, yet the evidence for the inescapable bill...

**SNIP** Usually, they vote with their feet and leave. But in extreme cases like Detroit, they simply fail to pay them: Nearly half of the owners of Detroit's 305,000 properties failed to pay their tax bills last year, exacerbating a punishing cycle of declining revenues and diminished services for a city in a financial crisis, according to a Detroit News analysis of government records. ... "Why pay taxes?" asked Fred Phillips, who owes more than $2,600 on his home on an east-side block where five owners paid 2011 taxes. "Why should I send them taxes when they aren't supplying services?...

Michigan's Attorney General Bill Schuette, a Republican, said on Saturday he would defend retirees who risk losing public pensions because of Detroit's bankruptcy, putting him at odds with the city's emergency manager appointed by fellow Republican Governor Rick Snyder. Schuette, an elected official, said the Michigan state constitution is "crystal clear" in stating that pension plans are a contractual obligation that may not be diminished or impaired. "Retirees may face a potential financial crisis not of their own making, possibly a result of pension fund mismanagement," Schuette said in a statement. The attorney general said he would file in federal...

A lot of people have been writing about Detroit lately and why the one-time economic powerhouse is now a bankrupt echo of wasted opportunity. Most of it, coming from the usual suspects at MSNBC, is a lie designed to direct the public’s attention away from the oil – the lifeblood of the Motor City – on their ideological hands. The problems of Detroit are not so much economic one; they were caused, for the most part, by political corruption. Unlike most of those opining on television and in print, I was born in Detroit, in (the now gone) Mt. Carmel...

Failure sometimes has an inertia that is difficult to stop. Detroit’s reality is anything but pretty: Detroit city services are already stretched extremely thin. On average, police take about an hour to respond to calls for help, and 40% of street lights are shut off to save money. Because of a lack of funds, the police force has shrunk in size to the point that it simply can’t respond in any meaningful way to help citizens who are victims of crime. As you might imagine then, crime is horrific. City services are so minimal as to almost be non-existent. Yet...

The City of Detroit tried to file for bankruptcy last week. A state judge initially blocked the filing, but a federal judge ruled Wednesday this week that the bankruptcy case can move forward. More legal maneuvering is ahead and Detroit may well succeed in the end. After all, Detroit owes somewhere in the neighborhood of $18 to $20 billion to over 100,000 creditors. One group of creditors particularly wary of a municipal bankruptcy is Detroit’s public sector labor unions. They fear a bankruptcy judge might allow the city to cancel or reduce their pension or retiree health benefits. The unions...

What's the most important lesson to take away from the bankruptcy of Detroit? It's that when governments promise benefits they are unwilling to pay for, the system can very quickly come to resemble something designed by Bernie Madoff. Like many other cities around the country, Detroit promised police officers, firefighters, teachers and other public employees pension and post-retirement health care benefits, but was unwilling to set aside the money needed to fund those benefits. The city attracted workers with a total compensation package that included current wages and future benefits. Since the future benefits were substantially unfunded, they can be...

If I had a city, it would look like Detroit.

I’m sad. Detroit is my native city. Its decline from being arguably the world’s richest city to being America’s “first Third Word city” is tragic, politically criminal, and a warning to other Americans. The official declaration of Detroit’s bankruptcy last week could not have come as a surprise to anyone familiar with the Motor City’s atrocious financial condition. The city had no hope of ever recovering from its colossal over-indebtedness, and without a central bank standing by to create fiat credit to augment its insufficient revenue—the scheme that is the only thing keeping the even more colossally over-indebted national government...

Federal judge blocks lawsuits against Detroit’s bankruptcy Judge Steven Rhodes stopped three lawsuits threatening to undo the city’s Chapter 9 bankruptcy filing. Detroit retirees had argued that the bankruptcy could dimish their pensions. DETROIT — A federal judge agreed with Detroit on Wednesday and stopped any lawsuits challenging the city's bankruptcy, declaring his courtroom the exclusive venue for legal action in the largest filing by a local government in U.S. history. The decision by U.S. Bankruptcy Judge Steven Rhodes was a major victory for Detroit, especially after an Ingham County judge last week said that Gov. Rick Snyder ignored the...

A federal bankrutpcy judge ruled Wednesday that federal courts will decide if Detroit is eligible for bankruptcy, staying challenges to the bankruptcy in state court. Detroit's Emergency Manager Kevyn Orr—a bankruptcy expert appointed by Gov. Rick Snyder earlier this year to oversee Detroit's finances—has said the federal bankruptcy filing is necessary to get the city out from under some $18 billion in liabilities. But the city's employee unions argued the bankruptcy is an end-run around the state constitution, which protects their pension benefits. The unions backed a series of lawsuits filed in Michigan courts to block the bankruptcy. Last week,...

I’m sad. Detroit is my native city. It’s decline from being arguably the world’s richest city to being America’s “first Third Word city” is tragic, politically criminal, and a warning to other Americans. The official declaration of Detroit’s bankruptcy last week could not have come as a surprise to anyone familiar with the Motor City’s atrocious financial condition. The city had no hope of ever recovering from its colossal over-indebtedness, and without a central bank standing by to create fiat credit to augment its insufficient revenue—the scheme that is the only thing keeping the even more colossally over-indebted national government...