An important story barely getting any attention is the recent decision by a court in Detroit. The court ruled that, since Detroit is broke, the city can declare bankruptcy and by doing so avoid paying the pensions promised to retirees. Now that is accountability. And rule of law. And respect for a contract.
23,000 retirees negotiated to exchange some wages for a pension plan to pay them an average of $20,000 a year. One perspective would be that the funds in these pension plans are actually the property of the retirees…and therefore this should be seen as robbery. The judge said no. It is not stealing; it is bankruptcy.
By reframing this from theft to bankruptcy, the court is allowing the city to ‘erase’ billions of dollars of debt it agreed to pay to retirees. These retirees played by the rules, worked hard, retired with a pension. Then the city, with court support, decided it would seek bankruptcy protection to avoid accountability.
But this story gets nearly no coverage because once it is reframed as bankruptcy instead of robbery most readers just turn the page, failing to see the thousands of families like mine that are left holding the bag.
No comments:
Post a Comment