EFM Law Facing Repeal

[313WX]

Since we're talking about paying our bills that we owe, we can start with the state paying the money it owes Detroit:

http://www.detroitnews.com/article/2...CS02/201040375

I believe the $220 million owed would cover the debt... After that, let's talk about the state and the city coming up with solutions together that attack the legacy debts and that doesn't usurp the democratic voting process.

Detroit's debt is as much as $20 billion dollars.

That $220 million dollars would keep the city running for maybe 3-6 additional months.

[corktownyuppie]

One big difference with China as the lender and the US as the borrower. If the lender makes too big of a stink about it, the US just pays them off. The debt is denominated in dollars and the US owns the printing press. If the debt was denominated in euros or in gold, there might be a bigger problem.

I know what you mean by this. A few econ buddies of mine were toying around with the idea of what would happen if Detroit began running its own currency...like the Confederates did during the Civil War. We arrived at three conclusions:

[[1) We'd be able to pay all our debts, because they'd be denominated in Detroit Dollars. No EFM or bankruptcy necessary.

[[2) Detroiters would experience hyper-inflation because using the printing press to pay debt also results in deflating the Detroit Dollar.

[[3) All our expatriated pensioners who live out of the city and out of the state would be more likely to spend money back into the city. Much of our problem is that for ever $1.00 we spend on pensions and expenses, only a fraction actually ends up back into the local Detroit [[or even Michigan) economy.

So yeah, I see your point. That's why I'm not worried about the Chinese empire forcing me to choose my own bride Hyper-inflation, however...it's a possibility.

[rb336]

It is the democratic process. The people of Michigan elected the governor and the legislature [[last time I looked, Detroiters were able to vote for that). Now the democratically-elected government of the State of Michigan has a prblem on its hands which it needs to clean up. That is what the EFM is for.

so one elected body has the right to usurp the rights of another elected body? that is the stupidest "logic" I've yet heard

[Hermod]

so one elected body has the right to usurp the rights of another elected body? that is the stupidest "logic" I've yet heard

Yes, law at a higher level of gummint overrides law at a lower level. Remember how the Federal Civil Rights Act overrode the segregation laws of the southern states?

In addition, cities and counties are not sovereign. They are instumentalities of the state operating under a state charter. I would assume that gives the state the right to revoke the charter of a non-performing entity.

[Zacha341]

Yep, the debt being higher than anticipated is no surprise really. Under the Kilpatrick admin it was hidden, attention diverted, audits left undone as the corruption reached critical mass. Chickens firmly home to roost now.

Detroit's debt is as much as $20 billion dollars.

That $220 million dollars would keep the city running for maybe 3-6 additional months.

[Novine]

The $20 billion doesn't mean much without some context. A big piece of that is Detroit Water and Sewer which means the debt is an obligation of the ratepayers in the city and suburbs, not the city. Much of that "debt" isn't debt at all but future obligations for pensions, etc. While there is a concern about paying those long-term, those have less of an impact on current payments. Also, it's not as is Detroit isn't paying off its current debts. Debt payments are a significant part of the city's budget and those payments will continue to be made even if the city runs out of money for other needs. It's not as if the city needs to come up with the money today to pay off that $20 billion.

[Wesley Mouch]

The $20 billion doesn't mean much without some context. A big piece of that is Detroit Water and Sewer which means the debt is an obligation of the ratepayers in the city and suburbs, not the city. Much of that "debt" isn't debt at all but future obligations for pensions, etc. While there is a concern about paying those long-term, those have less of an impact on current payments. Also, it's not as is Detroit isn't paying off its current debts. Debt payments are a significant part of the city's budget and those payments will continue to be made even if the city runs out of money for other needs. It's not as if the city needs to come up with the money today to pay off that $20 billion.

Thanks for the clarification. I was wondering what that $20b represented. Clearly, debt is OK to carry -- especially if its in service of productive use. I trust that the water board debt is to build infrastructure. If that's the case, this is no different than any other city -- actually, its a sign of economic health.

[corktownyuppie]

Thanks for the clarification. I was wondering what that $20b represented. Clearly, debt is OK to carry -- especially if its in service of productive use. I trust that the water board debt is to build infrastructure. If that's the case, this is no different than any other city -- actually, its a sign of economic health.

Agreed. I really would like to see the DSWD debt on its own set of books and separate them from the City of Detroit balance sheet.

[rb336]

Yes, law at a higher level of gummint overrides law at a lower level. Remember how the Federal Civil Rights Act overrode the segregation laws of the southern states?

In addition, cities and counties are not sovereign. They are instumentalities of the state operating under a state charter. I would assume that gives the state the right to revoke the charter of a non-performing entity.

I looked at the 1963 constitution, and find no such provision for revoking the charter of a city, although the EFM is mentioned. Earlier manifestations of the EFM just didn't seem as extreme as Snyder's, which, until recent court cases, have acted in a star chamber fashion

[Zaiko]

Last week's Michigannow story on EFM legal situation.

http://www.michigannow.org/2012/03/0...call-petition/

The Benton Harbor paintings are deep.

Whirlpool got newly elected state rep Al Pscholka, who's been on one of their boards, to push the law that allowed them to takeover Benton Harbor. Al's last job was as local chief of staff to Fred Upton, grandson of Whirlpool.

“Fascism should more appropriately be called Corporatism because it is a merger of state and corporate power”. Benito Mussolini quote

[Schoolcraft]

The $20 billion doesn't mean much without some context. A big piece of that is Detroit Water and Sewer which means the debt is an obligation of the ratepayers in the city and suburbs, not the city. Much of that "debt" isn't debt at all but future obligations for pensions, etc. While there is a concern about paying those long-term, those have less of an impact on current payments. Also, it's not as is Detroit isn't paying off its current debts. Debt payments are a significant part of the city's budget and those payments will continue to be made even if the city runs out of money for other needs. It's not as if the city needs to come up with the money today to pay off that $20 billion.

Now we're working with some common sense! The news went from dismissing the screams and cries that the state owed the city money to news reports of "well Detroit's REAL debt will be 20 BILLION by the year 2036!" when the treasurer admitted Detroit was owed $220 million. Way to scare everybody chicken little. It's possible to work this debt off without state intervention, but there needs to be new ideas and a new mayor. I'll gladly vote for one of the people the governor has in mind for EM for mayor if they want to run.

[Danny]

That state of Michigan doesn't need an emergency manager operationg like a dictatorship. The United States Constitution operates in a "Checks and Balances" governing system so there would no other government or leader having too much power over other governments and the people. The EM dictatoship law must be appealed.

[Wesley Mouch]

That state of Michigan doesn't need an emergency manager operationg like a dictatorship. The United States Constitution operates in a "Checks and Balances" governing system so there would no other government or leader having too much power over other governments and the people. The EM dictatoship law must be appealed.

So Danny -- is it really just the dictatorship? Would you be OK with it if Jenny was appointing the dictator? How about if Barack Obama himself were doing the appointing?

And what would you do with a city that spends more than it takes in? Who would you make pay for their paychecks? Would you be willing to increase your personal taxes 20% to keep Detroit afloat?

Do you think bankruptcy for cities is a more equitable approach?

No one wants a dictator to clean up financial messes -- but unless you provide some answers to those types of questions, your resistance is pointless.

So provide an alternative -- not just a roadblock.

[Meddle]

I would have no objection at "electing" our EFM

Yeah, we've seen how 'electing' leaders in Detroit works out.

[Shollin]

I'm still puzzled how in America one leader can appoint another leader and remove all the voting rights from the citizens, and the citizens don't even get to chose this appointed figure, and the appointed person doesn't even have to answer to the citizens. To think, all this time we have been fighting in the Middle East in the name of freedom and democracy, all we had to do was name a financial manager for the Middle East.

[Meddle]

I'm still puzzled how in America one leader can appoint another leader and remove all the voting rights from the citizens, and the citizens don't even get to chose this appointed figure, and the appointed person doesn't even have to answer to the citizens.

You must not be getting it. No one is removing voting rights of anyone. The people voted for the representatives who passed the law. The people voted for the Governor who is working within the law. The people voted for the Supreme Court Justices who ruled on the law, and in many cases the lower court judges also.

This is how the system works in America. The people vote for government leaders to represent them. When some elected officials become corrupt or ineffective, they can be removed or over ruled by other elected officials.

This law is part of the process of checks and balances that is the very core of government in the U.S.


If you don't like how an elected official is performing, you have the right to vote against them at the next election.

[Hermod]

So If America Misses a payment to China they have the right to appoint us a new President. Is that what you guys are saying???

China has a wee bit of a problem here. The loan is denominated in US dollars and the president owns the printing press. He can quickly print up a stack of billion dollar bills and pay off China. That is why China cannot pressure us because of our debt. Of course in any new borrowing, China would demand the debt be denominated in gold, Swiss Francs, or some other hard asset.

[Danny]

YAY!

I'm definitely voting YES, YES, YES to appeal Public Act IV [[as known as the EM Dictator Act!). Detroit and rest of Michigan don't have to rely of emergency managers to solve its money crunch. The law is unconstitutional for government checks and balances. Snyder, you nerd! If you want to reinvent this state consectrate global jobs here. Let Detroit and the rest of its cities solve their money problems on their own.

[Zacha341]

Hah! As I've said before we take our medicine better when the dems put out the spoon. That's going to have to change as we see the repubs usually instill a bigger dose when it's their turn. We need to see what's coming and course correct earlier.

Though the EFM/ DPS debacle made even the most 'die-hard' dems take notice. Recall the teachers and their unions attempts at push-back [[withstanding the level of closed agreements), the protests and marches. There were even a few marches to Lansing when it was Granholm's house. Imagine that!

So Danny -- is it really just the dictatorship? Would you be OK with it if Jenny was appointing the dictator? How about if Barack Obama himself were doing the appointing?

[Meddle]

YAY!

I'm definitely voting YES, YES, YES

So you enjoy corrupt city officials?

[Shollin]

I'm still puzzled how in America one leader can appoint another leader and remove all the voting rights from the citizens, and the citizens don't even get to chose this appointed figure, and the appointed person doesn't even have to answer to the citizens.

You must not be getting it. No one is removing voting rights of anyone. The people voted for the representatives who passed the law. The people voted for the Governor who is working within the law. The people voted for the Supreme Court Justices who ruled on the law, and in many cases the lower court judges also.

This is how the system works in America. The people vote for government leaders to represent them. When some elected officials become corrupt or ineffective, they can be removed or over ruled by other elected officials.

This law is part of the process of checks and balances that is the very core of government in the U.S.


If you don't like how an elected official is performing, you have the right to vote against them at the next election.

I don't have the right to vote in the person governing my city anymore. This person has the ability to raise my taxes, sell city assets without any vote or input by the citizens. By the same token, Obama can just appoint a financial manager to all 50 states. They can all be his cronies. We elected him so he should have this authority.

[Meddle]

I don't have the right to vote in the person governing my city anymore.

Sure you do. But if the person you vote for doesn't perform properly, they should be able to be removed before they do further damage.


And if you haven't noticed, other elected officials have been removed from office or overridden many times in the past throughout the country. Some have even been arrested while in office.

Just because someone is elected doesn't mean they can do whatever they want if it isn't in the best interests of the people, nor does it guarantee they will remain in office until the next election.

[Cincinnati_Kid]

So you enjoy corrupt city officials?

Last time I checked, Detroit isn't the ONLY city in the US that suffers from corruption. What makes Detroit and Wayne County different, is the officials that were corrupt did a poor job of covering their tracks. Detroit got caught faster than most.

[313WX]

I doubt it has any impact on Detroit's CA [[today's decision).

[Zacha341]

Precisely! Detroit's corruption has tended to be more sloppy and open. As though no one was looking or would ever look or check. Stuff laying out on the table... literally, bold and in your face.

When the economy tanked, and the tax base eroded to crisis levels, the revenues, costs, budgets came under scrutiny. From that missing moneys, diversions and corruption in general was very easy to uncover.

Last time I checked, Detroit isn't the ONLY city in the US that suffers from corruption. What makes Detroit and Wayne County different, is the officials that were corrupt did a poor job of covering their tracks. Detroit got caught faster than most.