Op/Ed: Does Voting for Detroit's 'Grand Bargain' Deal Make Financial Sense for City Retirees?
"How many times have you been told something is good for you, when in reality it might not be. Pressure to suppress doubt can become overwhelming. Especially when nearly every elected leader, print, broadcast media resource, plus some fellow citizens boast loud as one can hear or read -- do this or else.
The Economic Basis of Careful Review For or Against "Detroit's Grand Bargain" Deal
City of Detroit retirees are facing a life transformation choice. Whether proposed cuts are 4.5% or 30% in monthly pension, any reduction in revenue has real life consequences.
Utilities, fuel oil, car repairs, food. rent or mortgage obligations normally are not negotiable with creditors to reduce by 4.5% or 30% in view of the debtors monthly income has decreased. In fact, according to the Bureau of Labor Statistics (BLS) May 2014 report:
"The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.3 percent in April on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics. Over the last 12 months, the all items index increased 2.0 percent before seasonal adjustment.
The indexes for gasoline, shelter, and food all rose in April and contributed to the seasonally adjusted all items increase. The gasoline index rose 2.3 percent; this led to the first increase in the energy index since January, despite declines in the electricity and fuel oil indexes. The food index rose 0.4 percent for the third month in a row, as the index for meats rose sharply."
Let's break these numbers down a bit. From April 2013 to April 2014 all items: Food, Utilities and Shelter, Medical Care, Airline Fares, New Vehicles, Used Cars or Trucks, and Recreation rose 2.0%. During the previous period of study - March 2012 - March 2013, BLS cites the Consumer Price Index rose, "1.5 percent increase for the 12 months ending March." Thus, the average cost of living increase from March 2012 to April 2014 in prices for basic consumer goods, necessaries and services rose 3.5%."
Detroit Retirees are being asked to reduce monthly annuity income by 4.5% or more, but notwithstanding eliminate any future cost of living pension adjustments over the course of their lifetime."
Read more: http://www.reachoutjobsearch.com/2014/06/oped-does-voting-for-detroits-grand.html#ixzz34kV3LTNP
