Black-controlled Detroit is in a “death spiral” and has real debts of in excess of $17 billion, the emergency manager appointed by the state of Michigan has announced.
Kevin Orr, appointed to try and rescue the disaster created by decades of black rule and white flight, is three months into his 18 month contract and has now announced a dramatic default on payments of unsecured debts of $2.5 billion.
The debt default, which will almost certainly result in a string of lawsuits from angry creditors, is Orr’s desperate attempt to try and “turn around” the city.
The announcement includes an offer to creditors to take about 10 cents on the dollar of what the city owes them. If the offer is rejected—as many observers believe it will be—the city will finally collapse in what will be the largest municipal bankruptcy in US history.
“We’re tapped out,” Orr was quoted as saying. “We need to come up with a plan to restructure our debt obligations and our legacy obligations going forward—that is: pension, other employee benefits, health care, so on and so forth.”
He added that his team “is prepared for potential lawsuits from creditors not pleased with the arrangements under the plan.
“If people are sincere and look at this data, you would think a rational person will step back and say, ‘This is not normal … but what choice do we have?'” Orr said.
Contrary to establishment claims, Detroit’s fiscal nightmare is directly racial in origin.
Once the western world’s premier industrial city, a growing black population made it impossible for whites to live in the metropolis. Massive white flight occurred, and the majority black city slid inexorably into Third World status.
The city’s budget deficit could top $380 million by July 1. Orr believes Detroit’s long-term debt is more than $17 billion.
Orr backed down from his earlier claims when he accepted the job that he would carry out the “greatest turnaround” in American history. Now, he said, the chances of bankruptcy are 50-50 for Detroit.
In reaction to the debt default announcement, Moody’s Investors Service downgraded a number of Detroit bonds, including its general obligation unlimited bonds. As a result, all Detroit bonds are now below investment grade.
Hetty Chang, a vice president with Moody’s, said “the emergency manager’s proposal to creditors indicates further debt restructuring.”
“We also believe the city’s risk of bankruptcy has increased over the last six months,” she said in a statement.