Pension problems were key to Detroit's bankruptcy

Published: Sunday, Dec. 15, 2013 - 7:10 am

Re "Pensions didn't spur Detroit fall" (Letters, Dec. 13): Steve Smith of the California Labor Federation in his letter ignores the numbers, particularly that about half of Detroit's $18 billion in debt is its pension fund. What difference does it make whether that spurred the fall? The bankruptcy certainly exposed the problem, as it has here in California. Smith says Detroit's woes were magnified by corrupt politicians who badly mismanaged the city's finances. That's correct, but a big part of which was the granting of unsustainable pensions. He would have us believe Detroit's public servants, stayed because they cared about their community, but how does anyone know why they stayed? Could it possibly be Detroit's 18 percent unemployment rate? Why should cities start taking a hard look at the economic challenges, as Smith suggests, if they don’t look at the single largest expense?

-- David Tunno, Valley Springs

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