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General News

Detroit is Not Broke!

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$308.4M in 5 government funds (page 55)

$262.6M in Derivatives (a good year for the sewage and water funds, apparently -- page 59)

$214.1M in various Authorities and city corporations (page 63.   These are corporations within the corporation of Detroit, incorporated in 1806(!) -- page 68)

$1.2B in cash/cash equivalents and investments (page 84)

$205M in total government agency funds (page 192)

Now, as to deficits"

The claim from another NY Times story is that the city is $3.5B short in pension payments.   This figure is repeated in many articles, but virtually all of these articles are citing Kevyn Orr or his spokesperson, and lack reference to the underlying figures.   A New York Times article in their Dealbook section says this figure came "(s)eemingly out of nowhere "!  

Well, it came form somewhere.   Here's where: the original source is on page 23 of Orr's "City of Detroit Proposal for Creditors:

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[blockquote]

   Further analysis by the City using more realistic assumptions (including by reducing the discount rate by one percentage point) suggests that pension UAAL will be approximately $3.5 billion as of June 30, 2013."

[/blockquote]  

Remember that these "realistic assumptions" include adopting a rule that the GASD has not even implemented yet.  

   But, what is the pension UAAL, you may ask?   The acronym finder describes it thusly:

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[blockquote]  

A pension funding plan should be based on an actuarially determined annual required contribution (ARC) that incorporates both the cost of benefits in the current year and the amortization of the plan's unfunded actuarial accrued liability (UAAL).

[/blockquote] 

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Scott Baker is a Managing Editor & The Economics Editor at Opednews, and a blogger for Huffington Post, Daily Kos, and Global Economic Intersection.

His anthology of updated Opednews articles "America is Not Broke" was published by Tayen Lane Publishing (March, 2015) and may be found here:
http://www.americaisnotbroke.net/

Scott is former President of Common Ground-NYC (http://commongroundnyc.org/), a Geoist/Georgist activist group. He has written (more...)
 

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