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Why is an AFHU Hebrew
University Gift Annuity
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It drives the next
generation of
technology.

'Oh You're
From Detroit?'

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President Obama views Mobileye in action— see video at www.afhu.org/CGA2

On his recent state visit to Israel, President Obama received a demonstration of
Mobileye from Amnon Shashua, the Sachs Family Professor of Computer Sciences at
The Hebrew University of Jerusalem. Mobileye, an Advanced Driver Assistance System,
saves lives and boosts automotive safety.

The Hebrew University of Jerusalem
is an engine of innovation and
discovery for Israel and our
global community.

When you create a secure AFHU
Hebrew University Gift Annuity—
with its high lifetime return, income
tax deduction and partially tax-free
payments—your annuity drives
Israeli-led innovation toward a
better and safer future.

AFHU Hebrew University

Gift Annuity Returns

Age
67
70

75
8o
85
90

Rate
6.2%
6.5%
7.1%
8.o%
9.5 %

11.3%

Rates are calculated based on a
single life. Cash contributions produce
partially tax-free annuity income.

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THE RETURNS ARE GENEROUS.
THE CAUSE IS PRICELESS.

Share in the vision of Albert
Einstein, a founder of The Hebrew
University. Help propel a catalyst
for research and learning that
strengthens Israel and transforms
our world.

For information on AFHU Hebrew University
Gift Annuities, please call AFHU Midwest
Region Executive Director, Judith Shenkman at
(312) 329-0332 or email: jshenkman@arhu.org

The Hebrew University of Jerusalem

Founded by Albert Einstein, Sigmund Freud, Martin Buber and Chaim Weizmann.
Sustained by you.

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AMERICAN FRIENDS OF
THE HEBREW UNIVERSITY

N. Michigan Avenue, Suite 1530
Chicago, IL 60611 • 877-642-AFHU (2348)

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www.afhu.org/CGA2

he Detroit Chapter 9 bank-
ruptcy is certainly center
stage. During the the last
five years, I have focused on the
financial crisis on my
radio talk show, The
Financial Crisis Talk
Center, and as Metro
Detroiters, we have all
witnessed Detroit's demise
over the last 40 years.
Detroit's bankruptcy
is, in part, the culmina-
tion of the problems and
outcome of the Great
Recession. The reces-
sion was many years in
the works — stemming from excess
available credit and the willingness
of individuals and small business to
continually refinance their debt and
live off credit rather than sound bud-
gets and savings as a foundation for
future security.
The lesson learned is that rolling
debt forward and living off of avail-
able credit is a recipe for disaster.
This is precisely what Detroit did,
and we know there are many other
cities guilty of the same.
I often say that bankruptcy is a
great tool. When right, it is the least
costly and most effective way of
shedding debt — and provides the
mechanism to save future income
rather than servicing debt.
This maxim is true for Detroit as
well, but there are some complexi-
ties. About $10 billion of Detroit's
staggering $18 billion debt is
unfunded pension liabilities ($3.5
billion) and health and other post-
employment benefits ($6.4 billion).
Of the rest, $6.4 billion is secured

debt — which you can't shed in a
bankruptcy. On top of that, Detroit's
borders and infrastructure needs
are based on a long-gone sprawling
community of nearly 2
million that now numbers
a mere 700,000.
So Detroit needs to
shed its size and its debt
to become viable, but $10
billion of the $12 billion
of debt that can be shed in
a bankruptcy (the rest is
secured debt) are obliga-
tions owed to the people
who have worked for the
city — many for their
entire careers. One third of this is
the unfunded pension obligation
and two-thirds represents the health
benefits. How much of the loss can
we expect these people to absorb?
Sometimes you need to sift
through the rhetoric and seek an
outcome that is morally correct and
just — without regard to the legal
wrangling.
If you are 60, and began working
for the city 30 years ago, you knew
a couple of things: Your pay would
be OK (not great); your hours would
be relatively reasonable; and, if you
stuck it out for the long haul, you'd
have a pension to retire with.
People did not come to you in
1985 when you were 32 and say,
"Hey, Charlie, you better not count
on that pension in 2013. It's not
insured; municipal governments will
be falling apart, and there's a strong
chance that the money you are
promised won't be there."
No matter how you cut the deck,
it is a wrong and unacceptable