Gov't Stealing More Than Your Gold...
Entrenched Elites, Mediocrity, Corruption in Motor City
“Can we help Detroit? We don't know.”
— U.S. Vice President Joe Biden
The birthplace of the automobile industry is now the largest American city to ever file for bankruptcy protection.
Bailing out Chrysler and GM with taxpayer money was apparently a politically attractive move. Bailing out the city is a different story....
While Biden is talking about Detroit in the statement above, the message between the lines is one that echoes ominously across the entire nation.
Can our political leaders help us out of this ever-worsening financial crisis?
It's become painfully evident that they just don't know what to do anymore.
The debt crisis has evolved into a humanitarian crisis too convoluted to fix using conventional methods.
Major corporations that were once the backbone of America, our nation's strongest and oldest cities, and millions of hardworking individuals are filing for bankruptcy at a pace that has been beyond sustainability for at least three generations now.
In a Nutshell
There's a lot of controversy swirling about in regards to Detroit's Chapter 9 filing for bankruptcy.
The once-bustling city was previously the country's fourth largest city and home to a thriving and lucrative automobile industry. Today, however, Motor City has the weight of the world on its shoulders.
It is $18 billion in debt, among other obligations, and owes $9 billion in unfunded retiree benefits.
As part of the bankruptcy petition, Detroit may be legally permitted to steal the pensions from those unlucky retirees in a futile attempt to "revive" the city.
Public workers protected by unions — firefighters, police officers, and general service workers — have filed counter-lawsuits claiming the filing violates the state's Constitution by cutting workers' promised pensions from its budget.
But Governor Rick Snyder argues that, while he is empathetic towards the grim situation, there are no other viable options — aside from bankruptcy — if the city is to have a chance at improving its catastrophic levels of financial need...
Supporting her governor, spokeswoman Sara Wurfel asserts: “We have full confidence in the legality and constitutionality of the governor’s and emergency manager’s actions.”
Not Fair, Not Right, Just Is
However, a Michigan circuit court judge in Ingham County begged to differ.
Late last week, she ordered the Chapter 9 petition unconstitutional as it would essentially screw over public workers — honorable people that have spent their lives dedicated to the city's security and well-being.
Judge Rosemarie E. Aquilina said, “It’s cheating, sir, and it’s cheating good people who work...[and] will cause irreparable injury [to the pensioners]. It’s also not honoring the (United States) president, who took (Detroit’s auto companies) out of bankruptcy. I know he's watching this.”
From the sounds of Aquilina's impassioned rant, she expects Obama to float down like an angel from above and make sure the existing commitments are honored; then all will be well again.
And while I think Aquilina is a tad out of line to suggest our executive power intervene in a judiciary process, I understand why she's upset. The ramifications for public workers is, at best, an unfortunate side effect of these deplorable provisions of bankruptcy.
Tens of thousands of current and former city employees are enraged about the attack on their pensions and medical benefits promised to them decades ago.
Kevyn Orr, appointed "Emergency Manager" for the city, has told public unions to brace for “significant cuts,” but neglected to go into details. We know he's talking about billions of dollars in lost benefits for a sizable portion of Detroit's working people.
Nobody is arguing that the entire messy situation is anything less than a terribly sad shame.
But is anyone really surprised this is happening?
For 60 years, Detroit has survived by the skin of its teeth in the midst of serious mismanagement while spending non-existent money in all the wrong places.
Sounds familiar, doesn't it?
It should. That's exactly what's been going on in the rest of the country for equally as long.
More Detroits to Come
If you think you won't be affected by this story because you don't live in Michigan, think again. This problem is not unique to Detroit.
Cities, including ex-powerhouses, across the country face dire financial hardships.
It's important to realize this case could create some substantial benchmark laws. Just as Cyprus set a precedent, as well as cast a dark shadow of doubt on the banking institution, this Detroit debacle casts an even bigger shadow of doubt on the entire American system.
American cities, including city officials and leaders, as well as citizens would be smart to pay attention throughout this process.
Former Michigan Gov. Jennifer Granholm has publicly stated that the federal government needs to think long and hard about adopting policies that prevent other cities from going down this same treacherous path:
We need a strategy, nationally, like other countries have, to create and keep good middle-class jobs here, and we need a Congress that would support that strategy... This is not just Detroit. There are 50,000 communities across the country that have lost factories since the year 2000. This is not just a Democratic problem. This is a problem across the country.
David Brooks of the New York Times said Detroit to him is “Declimism 101.”
Brooks elaborated: "Whether it's the Roman Empire, the British Empire, the Spanish Empire. You've got entrenched elites. There are entrenched special interests. They're together forever and ever. They get a culture of mediocrity. They get a culture of cronyism, and it just collapses."
Gov't Stealing From You to Combat Their Debt
If you're like us, you're tired of listening to these cronies ramble on about how to fix the system they screwed up, while only offering changes that take more money from hardworking American taxpayers instead of out of their own overstuffed pockets...
Yesterday my colleague, Nick Hodge, wrote about gold confiscation and today I wanted to shed light on how the government won't stop there. They're going after your retirement savings too; as demonstrated by the unfolding Detroit drama.
Perhaps you should think about finding a way out of this financial mess outside the system so you and your loved ones can thrive independently even if (read: when) this ship does go down.
Farewell for now,
Brittany Stepniak is the Project Manager and Editor for the Outsider Club. Her “big picture” insights have helped guide thousands of investors towards achieving and maintaining personal and financial liberties while pursuing their individual dreams in lieu of all the modern-day chaos.