<story><title>Detroit files for Chapter 9 bankruptcy amid staggering debts </title><url>http://www.freep.com/article/20130718/NEWS01/307180107/City-Detroit-has-filed-Chapter-9-bankruptcy</url></story><parent_chain><item><author>rayiner</author><text>I think this bankruptcy is an exciting thing for Detroit. The purpose of bankruptcy is a reboot and if anyone needs a reboot it&amp;#x27;s Detroit. Of course, Detroit isn&amp;#x27;t the only city going through or considering bankruptcy. Unlike most people, I view the nationwide phenomenon of municipal bankruptcies positively. Years of unsustainable policies have left the big cities of the U.S. in a financial state where they can no longer effectively provide services. In 2013, 40%+ of Detroit&amp;#x27;s revenues went to bond payments, pension benefits, and health benefits to retirees. This is money taken away from providing services to current residents of the city.
Bankruptcy will mean bond money will no longer be so easily forthcoming, but that&amp;#x27;s a good thing. Cities will be forced to grow within their means, and that pressure will force more prudent fiscal policy going forward.</text></item></parent_chain><comment><author>ChuckMcM</author><text>It is my hope, and this is unpopular I know, that Detroit successfully unburdens itself from all obligations associated with pension plans. I certainly support pensions for people who dedicate their life to public service, but seeing cities and counties decimated by poorly managed pensions is crushing. Between early qualification, and &amp;#x27;punching&amp;#x27; or otherwise basting your pension salary based on your last year worked, have been policies that have robbed other pensioners and citizens alike of benefits and services. Without a reasonable discussion about what can be expected of the taxpayers to bear, and what cannot, we will see more Detroits.</text></comment>
<story><title>Detroit files for Chapter 9 bankruptcy amid staggering debts </title><url>http://www.freep.com/article/20130718/NEWS01/307180107/City-Detroit-has-filed-Chapter-9-bankruptcy</url></story><parent_chain><item><author>rayiner</author><text>I think this bankruptcy is an exciting thing for Detroit. The purpose of bankruptcy is a reboot and if anyone needs a reboot it&amp;#x27;s Detroit. Of course, Detroit isn&amp;#x27;t the only city going through or considering bankruptcy. Unlike most people, I view the nationwide phenomenon of municipal bankruptcies positively. Years of unsustainable policies have left the big cities of the U.S. in a financial state where they can no longer effectively provide services. In 2013, 40%+ of Detroit&amp;#x27;s revenues went to bond payments, pension benefits, and health benefits to retirees. This is money taken away from providing services to current residents of the city.
Bankruptcy will mean bond money will no longer be so easily forthcoming, but that&amp;#x27;s a good thing. Cities will be forced to grow within their means, and that pressure will force more prudent fiscal policy going forward.</text></item></parent_chain><comment><author>Shivetya</author><text>It will be interesting to see how pension liabilities and current pension guarantees are handled. This is a very large scale problem not just in Detroit but across America, where the retirement guarantees given to retiring politicians and government workers is very costly.&lt;p&gt;If they force the bond holders to eat it all then the market for municipal bonds will be hurt badly. The irresponsible largess in the current government pension system needs to come to an end.</text></comment>