Pensions are a joke. I hate to say this but look at the teachers of Mass as a good example of just how much so. 20 years ago teachers paid 2% of their salary into the pension, today they pay 10%. Do you expect that in any reality today's teachers are going to see that returned to them?

Basically, promises are made that have no bearing on reality and the now has to suffer for it. I wish they'd give them the opportunity for a 401k. At least then they'd have an option of seeing something after 40 years of dedicated public service.

Is it really a sacrifice if you promise yourself something impossible and then fail to make good on it?

Oh, please. These pensions are impossible now, but that's because of decades of underinvestment and out-of-control health care costs.

Also, the workers didn't promise themselves anything. They made a deal with their employers. The employers didn't have to agree to anything. They did, and those deals should be honored.

There's little to no adversarial aspect in a negotiation between government employees over the size of government employee pensions.

Yep, especially when the unborn who are footing the generational robbery don't vote.

Do you have any evidence for that?

The employees getting the pensions are not the same ones doing the negotiating. By your theory, government employees would always get what they wanted and therefore never strike, but that's demonstrably not the ase.

It's not as though they let the garbage man write his own pension.

It's funny, when a bank NINJA-loans a half-million dollars for a 1000ft^2 bungalow, it's always the-purchaser-took-advantage-of-the-bank, and never, the-bank-should-have-known-better-and-deserves-to-go-broke.

The banks are presumably going to take a huge bath on bonds they bought from Detroit.

Is there reason to think that banks are major unhedged bondholders who will actually take losses?

I'd expect Detroit pension funds to be the bigger bond holders of Detroit bonds... No bank of note will have much exposure, the banks aren't stupid.

Any one know what kinds of perks Michigan as for state munis? In colorado you get a tax break on them.

If they do, it's only because Detroit literally has nothing of value left that can be taken.

"If they do"? Help me understand the word "if" there?

If, as in if the Federal Gov't doesn't bail them out.

No, certainly the garbage man doesn't write down his own pension. His union negotiates with the government over how much money (that doesn't belong to either of them at the time) to promise to all garbage men.

Banks deserve to be exposed to the risk they assume in general, but this issue has problems in addition to the problem of banks being sheltered from risk.

Yup. Bankers get bailed out, everyone else must give up what they worked for.