Snyder: Some Detroit Creditors May Never Be Paid

Associated Press ^ | July 19, 2013l | Dave Eggert,Corey Williams

[Biggirl]

DETROIT (AP) -- Michigan Gov. Rick Snyder says some Detroit creditors are not sure they will be repaid.

Snyder was speaking Friday, a day after Emergency Financial Manager Kevyn Orr made Detroit the biggest ever U.S. city to file for bankruptcy.

[E. Pluribus Unum]

Depends on their political affiliation.

[PGR88]

This is actually what the country needs - Governments, and many of them, going bankrupt.

Things have to change, and they will get worse before they get better, but they have to change.

[cripplecreek]

That’s what happens when you loan money to people you know can’t repay it. I suspect they were expecting a bailout.

Personally I would sign vacant land over to the creditors and I guarantee they would find a way to make it profitable. Oil and gas leases are worth consideration.

[Biggirl]

Right size Detroit.

[tennmountainman]

Of course, union thugs will be paid no matter what.

[Former Proud Canadian]

Sell off the DIA’s collection, Belle Isle, the water department, Detroit’s half of the tunnel, the Zoo. Have I reached $18 Billion yet? Keep selling until you get there.

[AzSteven]

I expect you are right. Anyone looking at the past 20 years, or at least the last 10, could clearly see Detriot was a lost cause. Loaning to them was a foolish act, and one that gets little sympathy from me.

Detroit should have done this in 2009; Obama had all the cards then and a bailout would have sailed through congress easily. Now? Don't think so.

[tennmountainman]

But you see, at some point, these bankrupt cities are going to want US
taxpayers to foot the bill, so they can begin the process of screwing up
their city all over again.

NO Federal Bailouts of bankrupt cities.
Decades of liberal policies destroyed their cities.
Let them sleep in the bed they made for themselves.

[cripplecreek]

The frightening thing is the fact that Detroit is just a tiny canary in a really big coal mine.

The NEXT 10 City Pensions That Will Run Out Of Money (Old article relevant to Detroit's Bankruptcy)

New York Unfunded liability: $122.2 billion and I suspect Chicago and LA are right up there too.

[Buckeye McFrog]

Pretty much true in any bankruptcy.

Rick Snyder, Master of the Freaking Obvious.

[SWAMPSNIPER]

Most of them may as well forget it.

[Malone LaVeigh]

Most of them may as well forget it

You're right about that. I attended a bankruptcy hearing as a creditor once. The line of those owed money was a mile long with the government and the banks at the front and everybody else jostling for whatever crumbs they could get. I was so far back that it didn't take an advanced degree in mathematics to figure out that I wasn't going to get squat.

[MrEdd]

Pensions will bring down the government.
Eventually nationwide and not just in the big cities.

We have known we were employing so many people it was mathematically impossible for us to pay the promised pensions to them since the 1970s.

There is no news story here. This is news like your twelve year old refrigerator crapping out is news. We knew it was coming.

[MrB]

political affiliation and reflectivity

[Secret Agent Man]

love how they put the word “may” in there. like there’s a chance in hell they will.

[Vigilanteman]

Personally I would sign vacant land over to the creditors and I guarantee they would find a way to make it profitable.

Your model has actually worked at several times in American history, including:

1. Revolutionary War pensions paid off with land grants in Vermont, New Hampshire, Maine and the western parts of the colonies, including where I live in SW Pennsylvania.
   
2. War of 1812 pensions paid off with land grants in the more remote parts of the Northwest Territories (present day parts of Michigan, Indiana, Illinois, Wisconsin.
   
3. Northern Pacific Railway bankruptcy (Jay Gould scandal, Grant administration), paid off with land grants in the Dakota Territory.

   None of these pay-offs covered the entire obligation at the time, but all of them returned wealth.

   I don't know if that could be the case with Detroit given what we can't do with the native population there. But lease it to the Chi-Coms as a special administrative region for 50 years, and they will make it work.

[wetickel]

How in God’s name is it even possible for a city with a population of 706,000 people to owe 100,000 creditors an average of $185,00 each? That is an average of $26,200 dollars for every man, woman, and child in the city. I have no sympathy for any business that would extend credit or services to what is obviously (and hopelessly) a dysfunctional city.

[cripplecreek]

I would clear the vacant land, sell oil and gas leases, then put the cleared land up for sale as the value rises. The value of the land will eventually rise because despite the mess the city is, there is private investing going on.

There is big money in and around Detroit but its private money like Ernst & Young, Compuware, Quicken loans, JP Morgan and they wouldn’t be there if they didn’t see a future there. Detroit sports are another big revenue generator in the form of the Red Wings, Tigers, and lions. (If it were up to me I would move the Pistons into Ford Field) There is also the Detroit Grand Prix, powerboat racing, and air racing.

Manufacturing is slowly creeping back in and will accelerate as the unions begin to strangle on the right to work law. The big 3 are unlikely to ever be non union but I think their suppliers will be free shops. The new bridge will bring a fair number of jobs in warehousing and freight handling.

[SunkenCiv]

Thanks Biggirl.