Detroit bankruptcy

Oh I realize that. Detroit's flight has been so rapid and uneven that it has basically obliterated the city's ability to provide basic services. And if you can't provide basic services, you can't attract businesses or human capital.

Detroit is in uncharted waters and consequently it demands a unique solution. But the city has a lot going for it and with proper management, they can make a recovery.

 

some ideas for redevelopment

http://detroitworksproject.com/wp-content/uploads/2013/01/DFC_Plan_Economic-Growth.pdf

 

This makes very little logical sense. Corruption in the city government is at most a symptom of the economic trends that doomed the city, and may or may not have occurred in good times or in bad - and really that related to the cause of it.

Second, bankruptcy & reorganization proceedings and the principles behind the process aren't intended to exact some divine retributive justice against bankrupt entities.

 

A huge chunk of the debt is pension and healthcare, the same problem that doomed GM and Chrysler. It is the same problem facing many multiplicities.

 

Single payer health care and 401K here we come. I have no idea why so many people think single payer system is such a bad idea, you do not even need a free system, you can still put in copays and or deductions to prevent over use of health care.

 

detroit is the model for how things will play out elsewhere......from sea to shining sea they will confiscate/dissolve pension funds in order to offset their mountains of public debt

 

It's really not the same at all - the circumstance of Detroit's industrial base and its rapid decline due to depopulation (which exacerbates all of these issues) is unique.

 

The only pensions in the future will be the feds pensions, they can always print more money unlike state and local governments.

 

how much would you value federal unfunded liabilities at?

i've seen figures anywhere in the tens of trillions up to 250 trillion. i just don't see how (even in the case of a severe dollar devaluation + 60% effective taxation) any of those figures can ever be honored. in my mind they will simply have to renege one way or the other.

 

Why? At the current rate of taxation, assuming 3% annual GDP growth and 3% inflation, the government will bring in 15 quadrillion dollars in tax revenues over the next 100 years, often the amount of time used to generate these unfunded liability numbers. Even using the ridiculous 250 trillion number, that's about 1.7% of the projected revenues.

Putting a big number in front of the word "unfunded liabilities" is a great way to scare people, but the math doesn't necessarily hold up. Making 100 year projections in general is an exercise in futility, but doing so only on expenses without looking at revenues is ridiculous.

 

'unfunded' already reflects the shortfall built-in....meaning future liabilities minus future projected revenue. the $250T number was put out by niall ferguson last year. i've never seen 100 years used as the timeframe for generating figures. most often i've seen 30 years, which ties in with treasuries as well as typical worker lifespans. anyways, i'd have to agree taht it's impossible to make any kind of accurate projection on future balance sheets. but along with japan and the EU, the US is clearly acutely overextended. one other factor that also doesn't help is state/municipal debt shortfalls are probably another $50T to tack on as well..

 

The US isn't acutely overextended. We need to adjust things, but lets not get too dramatic about it.

 

Right - but my point is that it's such a small sum relative to the total numbers out there. If you change the US growth rate from 3% to 3.1%, the total tax revenue generated climbs by over one quadrillion over 100 years.

Can you point me to his study? All I see when searching for him is a bunch of crazy sites warning about all hell coming, often using bright red bold letters to make their case. Not a single one mentions how he came to those numbers. What time frame did he look at (they all say the NPV of ALL future liabilities, which could be hundreds of years, for all we know)? What discount rate did he use? What was his growth rate estimate? As I noted above, over 100 years, a change from 3.0% to 3.1% changes the deficit or surplus by a quadrillion dollars.

The scare reports consistently use much longer than that. For example, the $38 trillion Medicare number is based on 75 years:

http://cnsnews.com/news/article/medicare-faces-unfunded-liability-386t-or-328404-each-us-household


The $38.6 trillion in unfunded benefits Medicare is expected to pay over the next 75 years equals $328,404.43 for each of the 117,538,000 households the Census Bureau said there were in the United States in 2010.

Social Security tends to be the same.

If you only look at 30 years, you end up with much smaller deficit numbers that aren't nearly as scary and don't make you famous when everyone on the internet starts repeating them.

 

Even more amusingly, that $38T number is based on this brilliant estimate:

“From the 75-year budget perspective, the present value of the additional resources that would be necessary to meet projected expenditures, at current-law levels for the three programs combined, is $38.6 trillion,” reads the report.

“To put this very large figure in perspective, it would represent 4.3 percent of the present value of projected GDP over the same period ($907 trillion),” states the Trustees report.


$907 trillion GDP divided evenly over 75 years = $12.09 trillion per year. US GDP last year was over $15 trillion. So not only does this estimate assume zero growth, it appears to assume that the economy over the next 75 years will average 20% smaller than today.

 

http://www.bbc.co.uk/news/world-18456131

it was $238T....and as u say, he doesn't state any specifics for reaching that #, other than future medicare/medicaid/SS

i see your point about growth, for instance, being an arbitrary variable. however, given the current fiscal snapshot and already mature service-based economy we're looking at, i would actually more concerned with growth decelerating south of 3%. hopefully, population demographics will somehow manage to prove me wrong..

 

Pippen, moving to Bern anytime soon? You've been thinking about it, planning it... but this ghastly rat race has delayed calls to action chasing what? Some measure of goodwill in saving a sinking ship?

No hero ball. No. MJ gone.

 

What should be a kind-of-interesting urban planning issue is instead boring soapbox with outrageously vague speculation about the amount of pension plan benefits in the year 2088.


Congrats Pip da G.

Hey btw- screw dwight howard and harden - I'm worried how wunderkind cyborg Daryl Morey IV handles the salary cap in the 2087 offseason. Can we pry smooth shooting wing Obama Vonn-Woods from the SA-Austin Spurs without paying the L-tax if the cap is set at 2 billion? It would be sweet to see him tearing up the Tesla-yota Center.

 

much prefer st. jean cap ferrat actually....not for setting up another residence, only for visits (new 75% tax rate down there no joke)..

 

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