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Detroit Doesn’t (Does) Expect A Federal Bail Out

From Reuters:

Bankrupt Detroit cannot wait for federal cavalry: city manager

By Anna Yukhananov | July 21, 2013

WASHINGTON (Reuters) – Detroit must dig itself out of the hole it created and cannot wait to see if the federal government will come to its rescue, the city’s emergency manager said on Sunday.

Kevyn Orr, charged with guiding the collapsed Motor City out of the largest municipal bankruptcy in U.S. history, said any outside assistance would be "great" but he is not banking on it.

"Hope is not a strategy from my perspective. I can’t plan on the basis of what may or may not happen or what help may or may not come," Orr said on "Fox News Sunday." "We are not expecting the cavalry to come charging in," he said. "We have to fix it because we dug the hole."

You can be damn sure the public sector unions are counting on the federal government bailing them out. And they will make sure the Democrat Party makes it happen.

Detroit filed for bankruptcy on Thursday, setting the stage for a costly court battle with creditors and opening a new chapter in the long struggle to revive the cradle of America’s auto industry.

If approved by a federal judge, the bankruptcy would force Detroit’s thousands of creditors into negotiations with Orr to resolve an estimated $18.5 billion in debt.

Detroit Mayor Dave Bing said he was talking to officials in Washington about what they could do to help.

"I’m not sure exactly what to ask for. I mean, money is going (to) help, no doubt about that, but how much?" Bing said on ABC’s "This Week." …

Why are they in talks if they don’t expect some kind of bailout? Probably they are discussing the best way to disguise the bailout as something else.

Michigan Governor Rick Snyder told CBS’ "Face the Nation" the city’s problems had been 60 years in the making and he saw no prospect of a federal or state bailout.

Perhaps Gov. Snyder doesn’t realize the power the public sector unions have over the Democrat Party.

Detroit has been hit hard by the move away from industrial manufacturing in America since the 1950s, its problems compounded by chronic mismanagement and a dwindling population. Retirees now far outnumber active workers among the city’s 700,000 residents, and unfunded pension liabilities are a key source of its problems…

Note the conspicuous absence of any mention of Detroit’s ‘Cadillac’ pensions and benefit plans for city employees. No, all of Detroit’s financial problems are due to the fact that "Detroit has been hit hard by the move away from industrial manufacturing in America since the 1950s."

Vice President Joe Biden said on Friday said it was unclear whether Washington could help.

Steven Rattner, who led the auto industry restructuring in 2009, said it would be a mistake for Michigan and the federal government not to provide funds for the city…

The bankruptcy led investors to dump the city’s municipal bonds on Friday but Orr deflected criticism that it will be hard for investors to lend the city money again.

Which was a very sensible thing for the bondholders to do. Since, even if there is a federal bailout, the fools who bought bonds will still take it in the neck. Just like they did with GM and Chrysler.

By the way, didn’t Mr. Obama once say he wanted to do for America what he did for Detroit? Or did he say GM? In either case, it’s bad news for the bondholders and the US taxpayers.

This article was posted by Steve Gilbert on Monday, July 22nd, 2013. Comments are currently closed.

2 Responses to “Detroit Doesn’t (Does) Expect A Federal Bail Out”

  1. There’s a certain class of people who think (a) government is like a checkbook … I can’t be broke, I still have checks!

  2. Michigan Governor Rick Snyder told CBS’ “Face the Nation” the city’s problems had been 60 years in the making…
    Isn’t that interesting? Though I would pare it back to 52 years. The 52 years that democrats have been running the city. There hasn’t been a Republican in office in Detroit since 1961. But I’m sure that’s just a coincidence that the city started falling apart at just about that time and has only gotten worse since.

    I guess those Republicans back in the 50s must’ve really screwed thing up. Democrats have been trying to fix it ever since, but (in a tribute to our illustrious king O) things were much worse than they thought. They’ve held off the bankruptcy for 52 years, but ultimately they just couldn’t fix the republican induced fall of Detroit.


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