The WSJ runs a story titled, Reckoning Nears for Detroit, by Matthew Dolan. Here are the facts about Detroit's finances:

  • City has lost 25% of its population between 2000 to 2010.
  • The population used to be 2 million.
  • Today the population is a mere 700,000.
  • In April 2013 Detroit had $64 million in cash; but owed $226 million in payments on pensions and other obligations.
  • Under emergency order the Governor appointed an emergency city manager who took control of the City.
  • The Mayor and a majority of the City Council will not seek re-election.

And here is the epitome of delusional thinking...

The American Federation of State, County & Municipal Employees Council says that when the Emergency City Administrator asks for a meeting to discuss concessions he is engaging in scare tactics.

Where is Robert Irvine, the guy from Restaurant Impossible when you really need him? Do the leaders of AFSCME suffer from ADD? These people should all be rounded up and shipped off to an island; they are too stupid to be Americans.

Insanity: Doing the same thing over and over again and expecting different results.  

In a related story this morning concerning the bond holders for Jefferson County, Alabama currently in bankruptcy consider this deal. 

JPM to take $842M haircut in Jefferson bankruptcy deal. Jefferson County in Alabama has reached a settlement with its creditors that paves the way for it to exit bankruptcy in what has been the largest municipal failure in U.S. history. Under the agreement, debt-holders will receive $1.84B out of $2.4B they are owed, with JPMorgan (JPM), the largest creditor, to take a haircut of $842M. With a number of other local governments in distress, the case is being closely watched.
Steve Lombardi
Iowa personal injury, workers' compensation, motorcycle, quadriplegic, paraplegic, brain injury, death
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