The Burypensions Blog has a post about Detroit’s pension reforms that have merely postponed fiscal collapse for another time (h/t John Ellis). The restructuring is being touted as returning Detroit to fiscal stability. But some disagree. From the post:
As in New Jersey, Detroit has assured fiscal collapse by passing weak reforms that artificially reduce contribution ‘requirements’ while leaving the unsustainable benefit structure in place and even crowing about their accomplishments.
We wrote about Detroit’s pension problem yesterday. The restructuring averted a crisis, but did not solve the problem. It kicked the can down the road but left a gaping hole at the heart of pension finance. As the Burypensions post concludes: “All the factors remain in place for fiscal collapse.”Unfortunately, a lot of people who believed the dishonest but pleasant promises Detroit’s ‘progressive’ politicians and labor leaders made to them over the years could end up hunting for jobs in their golden years. Golden arches, not golden years may lie ahead.The Burypensions Blog is must reading for anybody who wants to understand why millions of Americans may stand to lose the retirement pensions they now count on. Read it and weep — but more importantly, read it and plan.