Detroit's bankruptcy has been ruled legal. The pensions are not protected, as federal law trumps state when it comes to bankruptcy.
The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;
To borrow Money on the credit of the United States;
To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes;
To establish an uniform Rule of Naturalization, and uniform Laws on the subject of Bankruptcies throughout the United States;
Your state constitution is meaningless when someone comes into Federal bankruptcy court, because Bankruptcy is a delegated power.
This isn't "judicial activism", it's black-letter law.
I've warned people for the last several years -- since The Ticker began, in fact, that these bogus pension and "benefit" packages that were negotiated at gunpoint and by fraud with state and local governments are unenforceable irrespective of so-called constitutional protections.
They should be unenforceable because there was no true adversarial process and can't be so long as the people negotiating for the wages and benefits can elect the people on the other side of the table, and they both can and do.
But they are unenforceable because when push comes to shove bankruptcy is a federal matter and as such the so-called protections are worthless as the federal bankruptcy code does not recognize any such attempt to give priority to these claims.
They are in fact just a debt -- like any other debt.
Those of you who think you can simply crank up taxes on people, such as many are gambling on in Chicago, are delusional. Citidel's Kenneth Griffin correctly points out that what Illinois is doing is outrageously stupid; not only will producers leave (they have already begun to do so -- I left!) but in addition when push comes to shove the bankruptcy courts will not protect these pensions and alleged "benefits."
Good luck folks.
I joined the Detroit Police Department in 1986. At that time the city had an agreement with the federal government that made Detroit Police officers ineligible for social security and Medicare. We were led to believe that this was to our benefit. We were told that we would be taken care of upon retirement with a pension and health care.
Who told you that? Was it your union?
Today, this is no longer true. Because of the bankruptcy filing by the city of Detroit, the Emergency Manager has stripped me and my fellow officers of our health-care coverage and is trying to void our pension income.
No, Detroit went bankrupt because you, and a lot others like you, demanded that the city spend your pension funds on something else first and you believed they could still be spent on your pension. That of course is impossible; you can only spend a dollar once.
When this began you made up the "difference" by borrowing money. But borrowing is simply a promise to pay tomorrow what you don't have today, plus interest. Rather than say "NO!" to you for that additional spending, they said "YES!" -- but remember, it was you who voted for those people, including most-particularly your union that only existed because you authorized them as your bargaining representatives.
In other words you slit your own throat.
I spent more than 23 years with the Detroit Police Department as a patrol officer. I patrolled the streets of Detroit. I answered calls for service. I did not have an administrative job, nor was I an executive. I have seen some really horrific scenes and fought against the worst violent acts that most people cannot even imagine.
So what? You were paid for that. You also had funds put aside for pension and medical. And that would have been ok except that you didn't put aside enough because you believed that you could earn 8% when the economy was growing at half that, and in addition you spent the damn money on something else right up front so in fact there was nothing.
The simple fact of 8th grade math was intentionally ignored by both you and the rest of the people involved. In short you believed in unicorns and pots of gold at the end of rainbows, even though both are children's fairy tales and have never existed.
The belief in myths is bad enough but what's worse is when you start believing in things that are physically impossible, then charge that there's a conspiracy when they don't happen. Those who believed the oil companies "suppressed" 100mpg carburetors are among those fools, as are those who believe that pension funds can be blown on other things and still exist later.
Physics and mathematics are not suggestions and indeed they are superior to the laws passed by man. Man can repeal a bad law but nobody can repeal the laws of mathematics or physics. They just are, and you have only two choices: Accept them or face the consequences of refusing to do so.
I did not take a duty or medical retirement at the advice of my union. They told me not to worry---the retirement insurance coverage would take care of me. But that’s not true anymore.
Your union lied to you. But you are just as responsible, because if your union told you that your magical blue suit would prevent you from being shot or run over by a car, you wouldn't believe that. Nor would you believe that the magical blue suit would make you impervious to drowning if you were submerged in the Detroit river.
Yet you somehow believed that one can take less than the money required to fund a pension, promise someone 8% returns against an economy that has never returned that on a durable basis over the last 100 years (remember, "durable" is a roughly 40-year work career) and yet somehow the magical money fairy will make the funds you were "promised" appear.
You were defrauded by those who made those promises, but the chief defrauders were your very own union. I would assign all the blame there but that would be dishonest -- some of it is yours, along with the rest of the residents of the city, because you voted for and allowed the city to have a budget process that spent all your money twice, which is a physical impossibility, and you did nothing about it at the time.
Indeed the only way this could have worked is if you later stuck a gun up the nose of the residents of Detroit to replace the funds you already spent. I don't know if I need to state the obvious -- those who rob others deserve to be dropped where they stand -- but in this case that doesn't matter either because those who saw it coming and had something to rob moved away where you couldn't threaten to shoot them any more -- politically or physically -- if you didn't get your way.
Now that the results are clear you wish to whine about it. But this is dishonest because if you have a high school education, and thus were minimally qualified to be a cop, you either knew or fraudulently claimed to have passed the math classes you had to pass to be able to be hired that these promises could never be kept.
I'm sorry you got hurt in the line of duty.
But I'm not sorry that you lost your pension because you both caused and allowed the city to spend those funds on other things, and in fact you demanded that your city and union not properly fund that pension and not spend it on other things.
When you have $500 for the car payment and go to the casino and blow the $500 on blackjack when the car is repossessed for failure to make the payment it's on you, not the casino.
Incidentally, in case you're curious I warned you about exactly this -- in May of 2008.
MORE THAN FIVE YEARS AGO.
4 On Your Side revealed how David Eckert rolled through a stop sign in Deming.
A K-9 named Leo alerted that it sniffed drugs on Eckert's driver's seat.
And, for the next 14 hours, those police officers, and doctors at the Gila Regional Medical Center performed eight medical procedures including x-rays, rectal finger exams, enemas, and finally a colonoscopy.
According to a federal lawsuit, officers Bobby Orosco and Robert Chavez were two of the officers involved, and they never found drugs inside Eckert.
Our investigation reveals another chapter. Another man, another minor traffic violation, another incident with Leo the K-9 and another example of the violation of a man's body.
Police reports state deputies stopped Timothy Young because he turned without putting his blinker on.
So we have not one instance of sexual assault by pigs and doctors on a NM person, we have two, both of which were perpetrated on innocent people?
Both perpetrated by the same dog, the same police department and the same hospital.
Exactly why, may I ask, are not both that copshop and hospital barricaded by the supposedly-law-loving citizens of New Mexico, who instead of doing so are consenting to and allowing random persons to be sexually assaulted at-will by both cops and doctors?
LET ME BE PERFECTLY CLEAR, NEW MEXICO RESIDENTS: YOUR SON OR DAUGHTER WILL EVENTUALLY BE NEXT AND WHEN THEY ARE IT IS YOUR PERSONAL, JOINT AND SEVERAL FAULT AND PERHAPS THAT SON OR DAUGHTER WILL HOLD YOU PERSONALLY RESPONSIBLE FOR ALLOWING THIS CRAP TO CONTINUE.
This nation deserves what it gets; every person within a reasonable distance of those two entities who does not, right now, demand and enforce the immediate and permanent closure of both entities and the arrest, indictment, prosecution and imprisonment of every single person involved is in fact factually giving consent to what amounts to sexual assault under color of law -- that is, rape -- along with a raw and blatant violation of both 18 USC 242 and 42 USC 1983.
If you do not agree that this is tyranny defined why don't you try asking your wife or husband, say much less your teen daughter or son, if they would define forcible sodomy with foreign objects, literally at gunpoint, as tyranny.
I'm waiting for your thoughtful answer.
Update: Here's the complaint for one of the assaults.
"The benefits that we got, they weren't given to us. They were earned. These guys worked their asses off for said 30, 40 years, sacrificing life and ... health. The least they could do is have some sort of security after they're gone, after the fires are out."
You forgot the rest of the story.
For 30, 40 years you threatened and extorted the people of Detroit. You lobbied, petitioned and voted for that which you either knew or should have known was impossible to provide. You threatened to not put out fires if you didn't get these promises in the form of pensions and medical benefits, effectively putting a gun to the head of everyone in the city.
You forgot that irrespective of how much pressure you applied and how loudly you screamed, whether you threatened not to extinguish fires and go on strike or not and no matter how many signs you waved and sob stories you told to the electorate, it is not possible to make something that can't happen occur.
You can't jump over a building and a contract to do so is void and unenforceable because you contracted to do an impossible thing.
The blame for this lies both with you and with city management. The city made a promise it couldn't keep but you demanded the promises that you or your union bosses knew were impossible, and if you didn't know it was only because you willfully and intentionally ignored fifth grade arithmetic.
If you voluntarily place a gun in your own mouth and pull the trigger absent a malfunction you are going to blow your brains out. That is a certainty.
Likewise it is a certainty that two exponential growth functions, where one rate of growth is higher than the other, will inevitably run away from one another. When the higher-growth rate is an "obligation" and the lower is "revenue" bankruptcy is inevitable.
When you "contract" to do such a thing it is an utter certainty that if you live long enough you will not get paid in full and you might not get anything.
You thus contracted with someone to do an impossible thing and you either knew it was impossible or willfully ignored the fact that it was, when all you needed to understand to know that in advance was to have been awake during your fifth grade math class.
The same situation, incidentally, applies to Medicare -- that is, Senior Citizen medical promises. The federal promises alone are north of $200 trillion, not the $17 trillion that we "recognize."
This very same financial fact also applies to virtually all state and local pension and in-retirement medical plans, along with most private pensions, for the exact same reason.
I think it sucks that you're not going to get your allegedly-earned "benefits" but the money to pay those benefits never existed and was never going to.
This is exactly identical to knowing you make $27,000 a year, spending $37,000 a year, having $170,000 on the credit card and then whining that it's "unfair" when the card company won't let you run up another 10 large.
This, incidentally, is our Federal Government right here, right now, today -- just add the zeros to the above and you get our tax revenue, our spending, and our federal debt.
We, as Americans, must stop living lies right now because it is only through facing the truth that we can plan for the fact that we lied to ourselves and demanded that others lie to us, and thus that which is impossible is not going to happen.
Or we can keep doing what we've been doing and you, like this gentleman, can then claim to be "surprised" when the inevitable and known in advance occurs.
This one is good.... but you have to read between the lines to figure it out.
States from New York to California are taking steps to crack down on employers who improperly classify their workers or fail to declare their income. Thirty states have laws on worker misclassification, up from 23 in 2010, according to Construction Citizen, a website that says it seeks to advance social responsibility in the industry.
“There was money to be had,” Linda Donahue, senior extension associate with The Worker Institute at Cornell University in Ithaca, New York, said in an interview. “The success at identifying those employers has led to pretty substantial revenue for the states.”
Really? How and why? Let's see if we can figure this one out, ok?
An employer can save on average $3,710 annually in employment taxes for each worker earning a salary of $43,007, according a June 14 report from the Treasury Inspector General for Tax Administration.
Save? Uh, no, that's not how it works.
Payroll taxes are not "abated" or "avoided" by classifying someone as a contractor instead of an employee -- they just fall on the worker. As someone who has held both 1099 and W2 jobs there is no end-tax difference in payroll taxes.
That is, as a W2 worker you "see" half of the Medicare and Social Security ("FICA") taxes. As a contractor you pay both halves directly on your earnings. I have to file and pay them myself now and have since I sold MCSNet -- when I was an employee I, like everyone else, "saw" half in my paycheck but the other half was still paid on my behalf by the company. That you, as a W2 employee, don't see the tax doesn't mean it doesn't get paid -- it is in fact subtracted from the salary offered to you by your company.
Using U.S. Labor Department data, the report found that 9,098 construction workers in Tennessee were misclassified in 2006, leading to losses in unemployment insurance payments of up to $14.9 million and missed workers compensation premiums of as much as $91.6 million.
Uh, nope again.
A contractor is not eligible for unemployment. So why is he paying tax to fund a program he cannot access? Ditto for worker's compensation -- a contractor is not eligible for those payments.
This sounds like a scam all right -- but not by the employer or employee. Rather it is a declaration by the states that this is a scam they are running; these are not "taxes" used to fund insurance programs at all but are bare revenue grabs that happen to have as "justification" that they might pay out some of their funds to some injured parties.
Even though they have been mislabeled, workers dubbed independent contractors are liable for taxes and fees that employers would otherwise be responsible to cover.
Workers often don’t pay, according to Matt Capece, a representative of the general president of the United Brotherhood of Carpenters who investigates payroll fraud.
Now that's fraud -- tax fraud. But it's also easily-traced as a 1099 worker still generates a 1099 which is still filed with the IRS, and thus the entity paid who fails to remit the taxes due can be chased and fined or prosecuted.
But the "bad guy" is not the employer in that instance.
Note the sob story here:
Perry said he was initially paid $10 an hour, less than half of the prevailing wage for the type of work he was doing. He and his co-workers were told to file tax returns as if they were independent contractors or face layoff.
The following year he was hurt on the job leaving him unable to perform heavy work. After being terminated, he was denied unemployment benefits because he was wrongly labeled a contractor.
Ah, that's how it's supposed to work. When you're a contractor you are responsible for buying your own insurance, including what would otherwise be considered "unemployment benefits." So this guy took a job at a wage he negotiated with the person paying him, was happy with it at the time but then wants to go back and retroactively complain about it?
This is a legitimate option -- you choose not to have the safety nets that are available to employees because you desire to work without them, or to provide them yourself. Sometimes this is a bad decision and sometimes it's a good one. The point of such decisions is that you make them and swallow the consequences, for good or bad.
Are there abuses in this regard?
But it's not "fraud" when a buyer and seller both negotiate in the open air and come to agreement on a good or service sold for a given price.
There is a vast difference between a tax scam (that is, someone not paying taxes that are owed) and "contractor abuse." A contractor isn't immune from taxation; they are in fact responsible for filing and paying. If they don't then go after them -- not the person who wants to hire them on that basis.
As for state UI and Workman's Comp systems they exclude contractors from coverage, intentionally so. Why? Because that's the bargain -- if you're a contractor then you buy your own insurance coverage against being hurt and you accept the risk of being laid off or fired. That's the point of being a contractor rather than an employee -- you are paid to do a specific job for a specific purpose and paid a specific amount of money. You're not paid to show up and do as the employer directs, as an employee is.
Some people prefer to be sheep and paid $10/hour or whatever it is, doing whatever their employer directs on a given day. Others prefer to be hired to "cover this surface with wallboard", with the price being negotiated for the specific task at hand.
The contractor trades certainty of a job for flexibility to work for multiple people at a time should he so choose. This doesn't "evade" taxes, it shifts the responsibility for them from the nanny employer to the person doing the work.
Call things what they are folks -- oh, and as for the state UI and Workman's Comp programs? Let's label them what this article discloses they are too -- scams run by the states. I'm all too-aware of how some states (cough-Illinois-cough!) will allow people to claim "unemployment" even though they were fired for cause -- say, because they decided not to show up for work on a repetitive basis or even were caught drinking on the job!
Thanks for the admissions, *******s.
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