Detroit Bankruptcy Begs Question, Where Next? (Issue: Unfunded Pensions & Healthcare)

Detroit is bankrupt. And while we'd rather not think about it, rather keep it out of sight and out of mind, an October 13th 60-minutes segment provides informative, deeply troubling, and occasionally hopeful views of the realities. It's worth opening our eyes slowly, one at a time, and taking a peek at what it has to show and tell us.

 

Link here or above:

http://www.cbsnews.com/video/watch/?id=50157064n%3Ftag%3Dfacebook

 

But Detroit is not alone in its financial distress--and for the same principal reasons: unfunded or underfunded employee pensions and healthcare. From The Economist:

Other states and cities should pay heed, not because they might end up like Detroit next year, but because the city is a flashing warning light on America's fiscal dashboard. Though some of it's woes are unique, a crucial one is not. Many other state and city governments across America have made impossible-to-keep promises to do with pensions and health care. Detroit shows what can happen when leaders put off reforming the public sector for too long.

---"America's Public Finances: The Unsteady States of America," The Economist, Leaders Section (7.27.2013)

It's not a new story, but it remains an important one. There have been other municipal bankruptcies in California, Rhode Island and elsewhere, but much smaller in scale than Detroit. It was not so long ago a Detroit bankruptcy was unthinkable to most people. But there are now many other municipalities, and some states, where the same problems threaten the same result. It's worth reading more about it, and this article in The Economist is a good place to start.

Link here or above:

 http://www.economist.com/news/leaders/21582258-it-not-just-detroit-american-cities-and-states-must-promise-less-or-face-disaster?fb_action_ids=10201483504143189&fb_action_types=og.likes&fb_ref=scn%2Ffb_ec%2Fthe_unsteady_states_of_america&fb_source=aggregation&fb_aggregation_id=288381481237582