Without Cuts, Detroit out of Cash by April - Bing to Address Issue at 6PM Nov. 16

**iheartthed** · November-15-11, 01:13 PM

Originally Posted by R8RBOB

I posted this in the other thread, I will post it here.

Detroit can stop paying into pensions and health benefits. They could institute massive job cuts and the city will still be broke. Why? Because the city is not getting enough money coming in to offset the city being spent to maintain the city.

Detroit need to do the following:
1) declare a financial emergency thus triggering the need for a EM
2) The future EM and city leader need to come up with a plan to bring revenue into the city coffers [[increase population to increase tax base) and plan on creating a new Detroit.
3) give Detroit the GM/Chrysler treatment. Declare bankruptcy and apply for a bailout. To build a new Detroit will require money to make it happen. The old Detroit is dead and broke so trying to save a dead and broke city is a waste of money.

All the citizens are getting is band-aid suggestions that we know is not going to work in the long run. Bing could get the unions to agree on reductions and the City Council can get its job cuts but next year, Bing will be doing the same thing, crying broke because the tax base will still be shrinking and the money well will be dry. He will be going to the citizens asking them to pay the city 10 dollars or there will be no police or fire. What next?

Michigan will not allow Detroit to file bankruptcy.

**professorscott** · November-15-11, 01:30 PM

Originally Posted by iheartthed

Michigan will not allow Detroit to file bankruptcy.

What Michigan will or will not allow is rapidly fading into irrelevance. When you have insufficient money to pay what you owe, you are insolvent. If a court agrees that you are insolvent, then you are bankrupt.

The state would greatly prefer that Detroit not file for bankruptcy, but so what? The City can't pay its bills and has no hope of paying its bills. The most drastic measures conceivable will only affect money owed going forward, which is not sufficient to fix the problem. For instance, even if you cut DDOT service 100% tomorrow, you still owe the drivers for the work they did so far this week.

Detroit is, let us say, de facto bankrupt, and the City and State can fiddle all they want while deciding whether to convert the status to de jure bankruptcy. It is what it is.

**iheartthed** · November-15-11, 01:35 PM

Originally Posted by professorscott

What Michigan will or will not allow is rapidly fading into irrelevance. When you have insufficient money to pay what you owe, you are insolvent. If a court agrees that you are insolvent, then you are bankrupt.

The state would greatly prefer that Detroit not file for bankruptcy, but so what? The City can't pay its bills and has no hope of paying its bills. The most drastic measures conceivable will only affect money owed going forward, which is not sufficient to fix the problem. For instance, even if you cut DDOT service 100% tomorrow, you still owe the drivers for the work they did so far this week.

Detroit is, let us say, de facto bankrupt, and the City and State can fiddle all they want while deciding whether to convert the status to de jure bankruptcy. It is what it is.

Well, it's against the law for a municipality in Michigan to file bankruptcy without the state's consent. If you thought the state was broke now then wait until they have to start servicing their debt and borrowing at much higher rates after Michigan's by far largest city files bankruptcy. They'll most likely opt to funnel state money into shoring up Detroit's books, as well as using EFM powers to renegotiate union contracts.

**R8RBOB** · November-15-11, 02:50 PM

Originally Posted by professorscott

What Michigan will or will not allow is rapidly fading into irrelevance. When you have insufficient money to pay what you owe, you are insolvent. If a court agrees that you are insolvent, then you are bankrupt.

The state would greatly prefer that Detroit not file for bankruptcy, but so what? The City can't pay its bills and has no hope of paying its bills. The most drastic measures conceivable will only affect money owed going forward, which is not sufficient to fix the problem. For instance, even if you cut DDOT service 100% tomorrow, you still owe the drivers for the work they did so far this week.

Detroit is, let us say, de facto bankrupt, and the City and State can fiddle all they want while deciding whether to convert the status to de jure bankruptcy. It is what it is.

Very well said. Detroit could look through every couch and they still won't find enough change to get Detroit over the hump. To be fair to Bing, this problem didn't start when Bing got the job, it has been decades in the making.