Detroit Files Chapter 9, Should They be Bailed Out? [POLL]
The city of Detroit is filing for bankruptcy. Do you think the government should bail them out?
There are about 100 other cities in the country that are in the same shape financially. If Detroit gets help is that fair to the other cities?
Detroit’s filing of a petition for Chapter 9 bankruptcy on Thursday marks just a skirmish in what is expected to be a prolonged legal battle between labor unions, bondholders, and state officials over the future of a city that once symbolized the nation’s industrial might.
At issue is the fate of $5.7 billion in unfunded retiree health insurance and $3.5 billion in unfunded pension payouts for some 30,000 retirees and current city workers. Under federal bankruptcy law, contracts regarding the city’s obligations to these pensions can be severed. But labor unions, arguing that Michigan’s Constitution prohibits the diminishing of accrued public pension obligations, vow to keep up the fight in court.