Detroit $63M surplus

[Indentured Servant]

Originally Posted by Zippyman

Social security is actually "sustainable" - the people who are telling you it isn't sustainable are the ones who also want you to just move those funds over to their handy 401k accounts with insanely high fees. There is a huge pile of money going into social security & stealing a bunch of dimes & nickels as retirement funds flow in is a great way to make yourself a billionaire while not working or providing anything of value to society.

Plus, having a handy underclass of serfs with no potential to ever leave the workforce means the Waltons can always find a friendly little old lady to check your receipt at the door for minimum wage.. Just enough to cover the deductible for her blood-pressure medicine.

Yes....to a degree. However, mathematically, sustained zero population growth or fertility rates below 2.1 children per female would doom social security in the long run. This is why Japan and Europe economies and social safety net systems will be doomed unless there is massive immigration. Their birth rates are too low to not only sustain their social welfare system, but also too low to sustain their GDP. People are living longer and longer....but eventually will die and if birth rates are below the replacement threshold the longevity only mask and pending massive drop off in the population as the ratio of old to young in the population tilts to the old.

Immigration is a hot issue but without strong birth rates and births over death ratios, many countries economies are doomed without immigration unless they radically alter their models.

[lvmensch]

I would think the nature of the Detroit retirees settlement is being improperly portrayed. Basically the impact on the retirees was reduced to a low level and the loss of cost of living adjustment. The big deal is that the state constitution prohibition against modifying a pension was waived by the retirees. So we still do not know if the constitutional provision would have been enforceable if the retirees had not been satisfied with the deal.

In many states the constitutional protection of the pensions exists and may well be enforceable by the retirees in the face of a bankruptcy court decision. So defined benefit plans may well be much better protected than has been suggested here.

[Coldjensens]

Originally Posted by Geo-Aggie

Sorry, that was a confusing sentence. What I meant to express is that the State of Michigan had a pension plan in perilous shape back in the 90s, but in 1997 they switched over to a "Defined Contribution" (401k) plan and over the last 20 years the state's economy hasn't been dragged down by too many unsustainable pension promises/abuses. You can read more about these two plans here:
ORS - State Employees Retirement System

Essentially if you were hired before 1997 you have a pension, if not, you have a 401k. The 401k match is quite healthy, with surprisingly low fees, and should permit for great retirements for many who save appropriately - but for those who do not the risk is moved from the state (you and I) to the individual who made the decision to not plan. Contrast this with Illinois whose bleeding pension system has the state unable to set a budget for the past 3 years. Then you've got Michigan currently wishing to move toward a DC plan for teachers and teachers are fighting this? C'mon guys, think about how badly you're inevitably going to get screwed at some future point if you don't go the DC route. A pension sounds great, but 30 years from now when you retire, it might not work. You may be getting 20% of what was promised. Wouldn't you rather be in charge of your own future? I know this is super libertarian sounding of me, which is odd as I have a lot of socialist perspectives, but I simply don't trust these plans and I want to be in control of my own future.

Oakland, Macomb, and Washtenaw County have similar systems to the state, as do most cities within the counties (Note: Many Wayne County cities still have pensions). In fact just about every government entity that has a sustainable budget has gone away from pensions because it became quite evident in the 90s that pensions would not work as more and more employees abused the system, as in ColdJensen's post, and we began living to much older ages. Due this this, I have limited sympathy for people who have been screwed over my big pension collapses. I understand there are honest people who worked hard and simply didn't know any better, and that really, really sucks. But for these people, social security exists and will cover some retirement expenses. If they lived their entire working life not saving a penny, well, that's your own mistake. On top of this, look at what an employee in Macomb County is paid vs. Wayne County. This why Wayne County can't fill jobs. When you say "Oh, our pay sucks, but the benefits are incredible - you just have to trust that they are still incredible in 40 years." vs. "Our pay is good, and our benefits are a little above average, but you're mostly in charge of your retirement.", 90% of people are going to with the second plan. I know I would. I would never work a position that paid me 30-40% less for better retirement benefits, because quite frankly I'm probably not going to working somewhere for more than 5 years. That's the economy of 2017.

That being said, I still fully support Social Security, believe that fund to be sustainable as abuse of it is far more difficult, and would in fact like to see it expanded to higher incomes (remove the tax cap, but keep the payout cap) and to add a Universal Basic Income.

Except maybe at the executive level, Wayne County is a terrible employer overall, at least that was my wife's experience. She is thrilled to no longer be a County employee.

I look at people my age and hardly any of us have saved for retirement. I believe that when we all retire, the government will have no option but to take the 401K plans of those of us who did save and re-distribute it. There is no other source for the money. Naturally they will not just take the money, they will tax withdrawals very heavily and effectively take the money. The tax deferred concept is simply not going to work. On one hand it bothers me because I have struggled somewhat to save, but on the other hand, I do not want to watch my brother or my friends who saved nothing starve so I can live a little better. Too bad they cannot just take Donald Trump ad Hillary Clinton or Warren Buffet et als retirement funds and redistribute those since they have enough for thousands of retirements, but that will never happen.

[Retroit]

Originally Posted by Zippyman

Social security is actually "sustainable" - the people who are telling you it isn't sustainable are the ones who also want you to just move those funds over to their handy 401k accounts with insanely high fees. There is a huge pile of money going into social security & stealing a bunch of dimes & nickels as retirement funds flow in is a great way to make yourself a billionaire while not working or providing anything of value to society.

Plus, having a handy underclass of serfs with no potential to ever leave the workforce means the Waltons can always find a friendly little old lady to check your receipt at the door for minimum wage.. Just enough to cover the deductible for her blood-pressure medicine.

That's not what the Social Security Administration says.

https://www.ssa.gov/policy/docs/ssb/...v70n3p111.html

[goofy328]

Well; what is Detroit going to do with the money? Not surprised that they have a surplus, after coming out of bankruptcy.

[flyonpa]

Maybe they could pay some of the creditor they trough under the bus in bankruptcy...

[goofy328]

Originally Posted by flyonpa

Maybe they could pay some of the creditor they trough under the bus in bankruptcy...

They should. The way our economic situation is here in America it is just a matter of time before they'll have to borrow money again. What is the city doing to generate revenue so that they won't have to go into debt again. Detroit is a very large city, and suggestions to shrink the city have fallen on deaf ears in the past. Not sure if that would have worked anyway, but it would have reduced some of the responsibility. Bigger question is how do you manage a city of over 100 square miles without incurring debt. All of the major cities are in debt, and yet those cities continue to grow in spite of that debt. Well, not so sure about Chicago. But how will Detroit be any different?

[Fubarbundy]

Duggan's comments with Paul Smith after the keynote address in Mackinac mention the surplus will mostly go back to the pension fund.


https://www.youtube.com/watch?v=PrPAcQaYISg

[Coldjensens]

Originally Posted by flyonpa

Maybe they could pay some of the creditor they trough under the bus in bankruptcy...

They cannot give away government money without obligation. They can go to jail for that.

Whom did they throw under the bus? Most of the creditors bought into the deal and got something satisfactory to them. One of the biggest got Joe Louis and the right to tear it down and build something more sensible for the waterfront.

[ekman243]

Originally Posted by Fubarbundy

Duggan's comments with Paul Smith after the keynote address in Mackinac mention the surplus will mostly go back to the pension fund.


https://www.youtube.com/watch?v=PrPAcQaYISg

Wow, this is some speech by Mike Duggan of course some would never admit it but would rather say with their "expert" opinion Detroit self segregated and Coleman Young caused all of this dysfunction. Duggan spelled out the history well before Coleman Young.