The bankruptcy filing of Detroit us just a taste of things to come. Decades of mismanagement by politicians who gave people what they thought they deserved instead of being good stewards of the peoples money. Now a once great city is a burned out shell of it's former glory. The Motor City is no longer running on all cylinders. What was once the fourth largest city in the United States has falling into ruins. 1.8 million people at it's peak now barely cresting 700,000. 80,000+ distressed and abandoned properties.
How did this happen? It's simple, greed. Not greed from the big bad corporations that all the liberals seem to love blaming. Greed from people who didn't want to work for their 'just rewards'. During times of economic boon unions held a knife to the throat of the businesses and municipality to cement benefits and pensions long into their golden years. Benefits that at the time seemed sustainable. Benefits that were very, very lucrative to employees yet didn't account for future economic adjustments. The results are what we see now, large municipalities filing for bankruptcy protection from those same UNFUNDED LIABILITIES.
Unfunded Liability is defined as: The amount, at any given time, by which future payment obligations exceed the present value of funds available to pay them. For example, a pension plan's payment obligations, including all income, death and termination benefits owed, are compared to the plan's present investment experience, and if the total plan obligations exceed the projected plan assets at any point in time, the plan has an unfunded liability.
I worked in a union, so before any of my unionized readers start running your pie hole, I saw the waste and abuses that run rampant. And, to up the difficulty rating, I worked in a SMALL union operation. As a matter of fact, the very same union that Congressman Mike Michuad worked in, although Mike didn't work all that hard. My boss at the time told me all Mike ever did was punch in and politic on the phone with his feet up and I'll be damned that's all I ever saw him do too. It took them over a year to get rid of a guy that showed up drunk for his shift all the time. There was a guy that walked around with a box all day to make it look like he was busy. There was a guy, that I shit you not, could sleep standing up! And guess who the union spent all its time defending? The sick, lame and lazy. I was told by older guys that they didn't have to work hard, that I was last in first out (hiring order). Seniority ruled so a lot of the older guys did little to nothing. They were safe. Us young guys had to pick up the slack or we'd be the first out the door. And those bastards had the nerve to call the bosses greedy.
So, since these companies started to notice the young people busting their asses and the older ones gearing up for their big fat negotiated pension plans, they found it more lucrative to close up shop and move away. How can we blame them for that? The problem in Detroit was that these big bad companies were the ones paying the lion's share of the taxes in that city. So, when they packed up and moved, so did their money. And workers. And their money. The municipality kept right on chugging along like nothing was going on. Spending money on projected tax earnings that were based on the big bad companies hanging around spending their money and the workers hanging around and spending theirs. It has taken years for it to catch up to them, but it has...in a big way. Now, before you jump up and down, look up Detroit's liabilities. Over $12 billion of the $18.5 billion debt they are hoping to get bankrupcy help with are directly related to employment liabilities.
But...
In the heyday of Detroit the MUNICIPAL unions did the same thing that the big bad company unions did. Mandatory staffing levels, special pension rules (25yrs and 55yrs old full pension) lifetime medical benefits. Now that the city is a shadow of what it once was, these opulent benefits are crushing it under it's weight. The unions don't want to even talk about cuts. These benefits were hard fought and won (in a better time mind you). Women and men suffered in times of strike (when the company and municipality wasn't in a good position to bargain). The city made investments that someone ill equipped to judge investment potential and borrowed money for it. Some of those investments were never fully realized due to the mass exodus from portions of the city. Parks that were abandoned, infrastructure improvments no longer needed and other well-meaning yet poorly executed projects.
What does all this mean to me? I mean I'm from Maine and pretty much insulated from the sewage from Detroit. I'll tell ya what it means to me. I'm watching my federal government run the same way Detroit was being run. My federal government is hemorrhaging money so fast it has to have the Federal Reserve print $85 million a week and add it to the national money fund just to keep itself running. They are propping up a house of cards with more and more cards, eventually it's all coming down...just like Detroit. You know what the difference is between a criminal and a politician? A politician can steal from you and there is nothing you can do about it.
That's my two cents, spend 'em or put 'em in the dish for the next person.
