[Detroit Emergency Manager Kevyn] Orr on Friday sat down in a closed-door meeting with about 150 creditors, bond holders and unions to discuss the city’s fiscal situation, seeking concessions that would save Detroit millions of dollars in payments.
Perhaps the most dramatic aspect of his plan: Orr said, starting now, there will be a moratorium on debt payments for all unsecured funded debt. Creditors are being asked to take about 10 cents on the dollar of what’s owed them. Underfunded pension claims would get less.
This is my only comment – well, aside from the one where I note that Detroit should take another look at that zombie plan that I suggested a while back – but it’s a doozy: those underfunded claims that I bolded, if I am reading this correctly, represent 3.5 billion dollars’ worth of debt. The Emergency Manager is stating outright that at least 3 billion of that is going to be defaulted on. Now, I am a rank amateur at many aspects of public policy and all that, but I suspect that this will end up having adverse effects on the local economy, no?
I’m telling you, again: it’s already post-apocalypse, over there. They might as well just admit it.