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In My Native City Of Detroit, Atlas Has At Long Last Shrugged
Forbes ^ | 07/24/2013 | Prof. Mark Hendrickson, Grove City College

Posted on 07/25/2013 8:01:52 AM PDT by SeekAndFind

I’m sad. Detroit is my native city. Its decline from being arguably the world’s richest city to being America’s “first Third Word city” is tragic, politically criminal, and a warning to other Americans.

The official declaration of Detroit’s bankruptcy last week could not have come as a surprise to anyone familiar with the Motor City’s atrocious financial condition. The city had no hope of ever recovering from its colossal over-indebtedness, and without a central bank standing by to create fiat credit to augment its insufficient revenue—the scheme that is the only thing keeping the even more colossally over-indebted national government solvent—the only question was when someone would pull the plug.

Fiscally speaking, Detroit had been in the “walking dead” category for years. Last Thursday’s announcement by Detroit’s emergency manager, Kevyn Orr, finally acknowledged the inescapable facts.

Clearly, some Michiganders are still in denial and refuse to face those facts. Last Friday, Ingham County Circuit Judge Rosemarie Aquilina insisted that the Chapter 9 bankruptcy declaration be withdrawn, stating the Michigan constitution forbids any action that would decrease the pension benefits of public employees. In the first place, Judge Aquilina should read my article about will and abandon the delusion that a constitution can alter reality by making nonexistent funds magically appear; in the second, it is an unjust constitution that confers a protection on public employees that private-sector employees don’t have. A sounder constitution would have prohibited the city government from gaining control of employees’ retirement funds contributions and instead have mandated that those contributions all go into a private fund in the workers’ names where the city couldn’t touch them.

(Excerpt) Read more at forbes.com ...


TOPICS: Business/Economy; Culture/Society; News/Current Events; US: Michigan
KEYWORDS: bankruptcy; detroit
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There was a previous thread on this. However, it was hijacked by the apostrophe Nazis who harped on the Forbes editors for missing a typo ( the author the word "It's" instead of "Its", which sent several people into a grammatical frenzy).

That thread soon turned a discussion about the proper use of apostrophes in the English language instead of a discussion about Detroit.

I am hoping that the mods will allow this thread to go through ( I actually corrected the author's little mistake in the article).

Hopefully, people will focus on the TOPIC at hand and not be side tracked.

1 posted on 07/25/2013 8:01:52 AM PDT by SeekAndFind
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To: SeekAndFind

Bump


2 posted on 07/25/2013 8:03:04 AM PDT by uncitizen (Barack Obama hates white people)
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To: SeekAndFind

At our coffee group this morning, the Detroit issue came up. The analogy I used was that the parasite outgrew the host and killed it.


3 posted on 07/25/2013 8:05:16 AM PDT by abb
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To: SeekAndFind

Coming soon to our country, I fear. Stock up and arm up while your fiat dollars still have some worth - when Obama’s plan to destroy the country is fulfilled, it will be too late.


4 posted on 07/25/2013 8:11:33 AM PDT by tgusa (gun control: deep breath, sight alignment, squeeze the trigger .......)
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To: tgusa
The only government entity in the US that is allowed to run deficits forever is the federal government. Over time as all governments overspend they will cede more and more power over to the feds in order to keep their local coffers filled.

Those few states and cities that can keep their houses in financial order will most likely be plundered by the feds to keep the freeloaders fed.

We need to have a real enforceable balanced budget amendment so that no government entity, not even the feds, can run deficits indefinitely. That will force of day of reckoning for all politicians. The sooner the better.

5 posted on 07/25/2013 8:23:38 AM PDT by who_would_fardels_bear
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To: ADemocratNoMore; Aggie Mama; alarm rider; alexander_busek; AlligatorEyes; AmericanGirlRising; ...

Atlas Ping. This article has been reposted so that there can be a vigorous discussion of its points and not its punctuation.


6 posted on 07/25/2013 8:24:11 AM PDT by Publius
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To: abb

It is exactly that - the parasite outgrew its host. Parasite is, unfortunately, looking at a larger host to suck the lifeblood from — the US Government. “They’ can pay our pensions.

Detroit, Michigan, California, New York City and all the other blood-sucking union pension dumps need the Scott Walker treatment.


7 posted on 07/25/2013 8:24:29 AM PDT by bboop (does not suffer fools gladly)
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To: SeekAndFind

Yeah, that was a bummer yesterday. Detroit is my hometown too. When I first read Atlas Shrugged in college in the late 1950s (it was required reading in my Lit 101 class) I did not believe it could possibly happen anywhere in America, especially in thriving Detroit. Then came the 60s, the race riots, the auto union strikes, the rise of the Japanese auto industry and the flood of Detroiters to the burbs. I then realized Rand was right and left the Detroit area for good in the early 70s and now return only for funerals of relatives and friends.

This article is dead on. Stossel will do a special on Detroit tonite at 9pm on FoxBiz fyi.


8 posted on 07/25/2013 8:26:35 AM PDT by shove_it (long ago Orwell and Rand warned us about 0bama's America)
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To: SeekAndFind
It’s hard to feel sympathy for any of the vultures who are squabbling over Detroit’s carcass. Municipal bondholders certainly don’t merit sympathy for the huge losses they will incur. Anyone who invested in the debt promises of such a corrupt and poorly managed city deserves to lose money. They would have had to be blind not to see how broke the city was, so it seems that they made a cold, cynical, calculated bet on Detroit’s predatory government continuing to be able to find victims from whom to extract more money. While acknowledging that there are dedicated policemen and teachers in Detroit who labor under difficult conditions, it is still hard to justify economically the generous pension promises they have received when the average response time to a 9-1-1 call is 58 minutes and educational results have been so abysmal.

Since when does one's rights to contractual commitments of municipal bonds or as a pensioner depend on whether you deserve sympathy? The bondholders are entitled to rely on the dedicated sources of repayment, such as the utilities, without reference to whether or not they were "cynical" in doing so. If they were wrong in their calculation they will lose that source of repayment but not because there motives were suspect.

Similarly, if the pensioners lose their pensions it should be because they fall behind other creditors, such as bondholders, preferred because of contractual commitment in the bonds to sources of income, or otherwise by law.

It is as Mae West replied when someone observed, "Goodness, what a beautiful ring." Ms. West replied, "goodness had nothing to do with it."


9 posted on 07/25/2013 8:27:48 AM PDT by nathanbedford ("Attack, repeat, attack!" Bull Halsey)
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To: uncitizen

I visited Detroit on Thanksgiving in 1950. It was a big, beautiful, metropolis. If anyone could have been transported from 1950 Detroit to its 2013 remnant, they would have been shocked and flabbergasted.


10 posted on 07/25/2013 8:28:22 AM PDT by luvbach1 (We are finished.)
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To: SeekAndFind

Anyone that thinks Detroit is is the USA’s first third world city has never been to Memphis or New Orleans.


11 posted on 07/25/2013 8:29:36 AM PDT by fuente (Liberty resides in three boxes: the ballot box, the jury box and the cartridge box--Fredrick Douglas)
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To: SeekAndFind

a warning to other Americans
***********
It should be, but probably won’t. Too many other trivial distractions out there to bother being enlightened about the consequences of a failed city. The media will also ignore the Detroit story because it runs counter to their utopian/progressive agenda.


12 posted on 07/25/2013 8:32:23 AM PDT by Starboard
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To: nathanbedford

It has been opined that if Detroit’s bondholders are stiffed, then money in the municipal bond market will “dry up.”

I have a different take here. If cities become a riskier investment because Detroit is allowed to welch on its debts, there will still be money available.

The question is whether the cities can afford the new vigorish rate in the future.


13 posted on 07/25/2013 8:33:30 AM PDT by abb
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To: shove_it

This article is dead on. Stossel will do a special on Detroit tonite at 9pm on FoxBiz fyi.
**********
Hey, thanks for mentioning this. I enjoy his shows. And this one should be really good.


14 posted on 07/25/2013 8:35:02 AM PDT by Starboard
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To: All

any news on the state judge who tried to trump federal law by ordering the bankruptcy stopped?

It seems if this is the case the easy solution is to simply de-charter Detroit.


15 posted on 07/25/2013 8:36:34 AM PDT by longtermmemmory (VOTE! http://www.senate.gov and http://www.house.gov)
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To: abb

Although a string of other cities have failed in recent years, Detroit is the real canary in the coal mine. And the mine is getting ready to collapse.


16 posted on 07/25/2013 8:36:41 AM PDT by Starboard
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To: longtermmemmory

http://news.yahoo.com/fight-over-detroit-bankruptcy-begins-federal-court-040959917.html

Detroit manager scores first win over unions in bankruptcy bid

Reuters
By Bernie Woodall and Joseph Lichterman

DETROIT (Reuters) - A U.S. bankruptcy court judge on Wednesday dealt a blow to Detroit’s public employee unions and pension funds opposed to the city’s historic bankruptcy filing by suspending legal challenges in Michigan state courts while he reviews the city’s petition for protection from creditors.

Judge Steven Rhodes ordered three lawsuits filed by city workers, retirees and pension funds be halted and extended that stay to suits against Michigan’s governor, treasurer and Detroit’s emergency manager. Rhodes’ action ensures that the only path to fight the city’s Chapter 9 bankruptcy petition runs through his courtroom in downtown Detroit.

snip


17 posted on 07/25/2013 8:40:03 AM PDT by abb
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To: SeekAndFind
The official declaration of Detroit’s bankruptcy last week could not have come as a surprise to anyone familiar with the Motor City’s atrocious financial condition.

Proof that "Cloward-Piven" will and does work. It is not lost on Obama and his Marxists.

18 posted on 07/25/2013 8:40:15 AM PDT by Don Corleone ("Oil the gun..eat the cannoli. Take it to the Mattress.")
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To: fuente

Careful, those are the renowned “Chocolate Cities” that you dare question.


19 posted on 07/25/2013 8:42:55 AM PDT by T-Bird45 (It feels like the seventies, and it shouldn't.)
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To: SeekAndFind

The Judge ruling that the Pension fund had to be paid was ludicrous. What part of no money in the Pension fund did she not understand? Where were all her rulings when the mismanagement was going on. Why not rule for an Audit for criminal proceedings?

Nope, the liberal is going to redefine reality. Isn’t that at its root what liberalism is?


20 posted on 07/25/2013 8:45:32 AM PDT by American in Israel (A wise man's heart directs him to the right, but the foolish mans heart directs him toward the left.)
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To: longtermmemmory
The state judge was overruled by the federal court. It's up to the Michigan Legislature to impeach, convict and remove her.

As I've said in most Detroit threads to which I've responded, the solution is amazingly simple:

  1. Dis-incorporate the city of Detroit. This could be done by the state legislature.
  2. Sell off the city's assets to satisfy its bondholders and other creditors. This would include the art museum's stash.
  3. Let the remaining citizens of the former Detroit incorporate smaller, more viable communities from that portion of Wayne County that was once known as Detroit. Likewise, already existing suburbs could annex land that once was part of the former Detroit.

It's not that tough, and it's a good model for other cities that have grown too large and fallen into this trap.

21 posted on 07/25/2013 8:46:11 AM PDT by Publius
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Please Contribute Today!

22 posted on 07/25/2013 8:47:32 AM PDT by RedMDer (When immigrants cannot or will not assimilate, its really just an invasion. Throw them out!)
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To: T-Bird45

Yep, looks like chocolate. Taste like $h!t.


23 posted on 07/25/2013 8:49:26 AM PDT by fuente (Liberty resides in three boxes: the ballot box, the jury box and the cartridge box--Fredrick Douglas)
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To: fuente

One would think New Orleans can survive or get by on its tourist and convention revenues to the city. Memphis a little less so but Detroit has no such horse in that race.
Sponges and leeches have only so much OPM to draw from until the well runs dry which it has but old addictions are hard to break.


24 posted on 07/25/2013 8:51:42 AM PDT by tflabo (Truth or Tyranny)
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To: Publius; cripplecreek

Sounds like a plan. There are many burbs surrounding Detroit and two cities within its boundaries, though those two are probably on shaky ground too.


25 posted on 07/25/2013 8:55:02 AM PDT by shove_it (long ago Orwell and Rand warned us about 0bama's America)
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To: tflabo
One thing that New Orleans, Memphis and Detroit have in common is that they are ports and railheads. All three cities could continue to function in those capacities.

But to keep a port/railhead function running, you only need an employee base of 10 thousand people. That may end up being the only remnant of those three cities.

26 posted on 07/25/2013 8:55:52 AM PDT by Publius
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To: shove_it

The liberals will want to merge the ‘burbs with Detroit to make them pay for everything. Then people will leave the burbs too.


27 posted on 07/25/2013 8:56:31 AM PDT by GeronL
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To: abb

that is what bankruptcy is for, on central location.

I was ammused by the protests at the “surprise filing”. Bankruptcy filings as a rule tend to be last minute surprises. If anything the state court judge violated federal law by violating the automatic stay. (opens state judge to federal sanctions)

the pensions should have asked the bankruptcy judge for relief from the stay, in order to pursue a state court action. (which the bankruptcy judge would have said no anyways)

I suspect this state court judge is just part of the long line of Detroit corruption.


28 posted on 07/25/2013 8:59:58 AM PDT by longtermmemmory (VOTE! http://www.senate.gov and http://www.house.gov)
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To: GeronL
"The liberals will want to merge the ‘burbs with Detroit to make them pay for everything. Then people will leave the burbs too."

That's been tried many times before and hasn't worked. The libs are not in the drivers seat or even in the car any more.

29 posted on 07/25/2013 9:01:24 AM PDT by shove_it (long ago Orwell and Rand warned us about 0bama's America)
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To: Publius

I had to delete my own post there. Even sarcasm can take us off subject here...


30 posted on 07/25/2013 9:06:46 AM PDT by rlmorel (Silence: The New Hate Speech)
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To: nathanbedford

I seem to recall another Mae West quote about never wearing orange because sailors will try to jump on you...:)

Detroit ISN’T wearing any orange, and there aren’t any willing sailors out there.


31 posted on 07/25/2013 9:14:23 AM PDT by rlmorel (Silence: The New Hate Speech)
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To: SeekAndFind
Politicians believed that they could create a “fairer” city by raising taxes on businesses and productive individuals and redistributing wealth to favored political constituencies, particularly the public sector unions. In doing so, they killed the goose that laid the golden egg.

Touchy business, that of a parasite. You want to be able to drop off before the victim is bled dry; if you don't, you're no better off than your victim. This isn't all that difficult. Anyone watching the declining revenues as taxes increased could have anticipated that there would be a point at which the system would break as Zimbabwe's did. And what saved Zimbabwe eventually was a massive infusion of foreign cash, and that is precisely what the Detroit city council was hoping for.

They've been disappointed so far but I would be willing to bet that it isn't over. Why?

The ideology that causes Judge Aquilina to believe that political action—policies, laws, even constitutions—can make reality conform to one’s political vision is the very ideology that already has devastated Detroit.

The reason is that the ideology Stossel identifies here has found a home at the federal level. It has permeated the 0bama administration and the Democrat party in general. They'll find the money, and it will be from somebody they don't like. That's what redistributionists do.

This is bad enough on the level of the United States, a victim which will be the slowest of all to bleed out. If there were a world government, however, or some international body capable of taxing everyone, well, then the parasite would have an even larger victim to exsanguinate. It does explain the progressive passion for world government and the UN, doesn't it?

32 posted on 07/25/2013 9:17:28 AM PDT by Billthedrill
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To: fuente
Anyone that thinks Detroit is is the USA’s first third world city has never been to Memphis or New Orleans.

In the 1050's Memphis was voted the country's cleanist city,safest city, and quietest city of any city of its size in the country. Its black population then was around 33%. Now (2012 data),Memphis’ violent crime rate of 871.88 crimes per 100,000 residents ranks only behind Flint, Mich.; Detroit; St. Louis; and Oakland, Calif.The percentage of blacks in Memphis is 64.1% which is 6th in the country.

33 posted on 07/25/2013 9:23:21 AM PDT by mjp ((pro-{God, reality, reason, egoism, individualism, natural rights, limited government, capitalism}))
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To: abb

Maybe communists will quit promising what it is that they are not capable of delivering.

LLS


34 posted on 07/25/2013 9:30:52 AM PDT by LibLieSlayer (FROM MY COLD, DEAD HANDS!)
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To: shove_it
I then realized Rand was right and left the Detroit area for good in the early 70s and now return only for funerals of relatives and friends.

For some reason, one thing I don't recall in "Atlas Shrugged," was Rand specifically naming the act of unions and politicians getting in bed together, and sucking a city's taxbase dry. I supposed of course, it doesn't matter what you call them--a moocher is a moocher.

35 posted on 07/25/2013 9:31:55 AM PDT by Lou L (Health "insurance" is NOT the same as health "care")
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To: T-Bird45

Rancid and rotting chocolate.


36 posted on 07/25/2013 9:33:52 AM PDT by LibLieSlayer (FROM MY COLD, DEAD HANDS!)
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To: Lou L
In Atlas Shrugged, union boss Fred Kinnan, the only honest moocher in the book, discusses sucking dry the entire industrial base of America. And he gets his way.
37 posted on 07/25/2013 9:34:39 AM PDT by Publius
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To: nathanbedford

This stinks. I have been involved in muni-bond sales in the past and worked closely with the bonding attorneys to submit all financial documents and future covenants to demonstrate future stability.

My point here that someone or some persons were in cahoots to allow them to continue to issue bonds that they knew were likely to be defaulted on. Even if they try to blame it on “staff lied to us about our finances” the elected officials should have caught these schemes at every budget workshop or presentation. The first thing in every budget discussion I have ever been a part of is the current debt and how is that being paid for, followed by this is how much is left to pay for current services, and finally this is what is left over after depositing money into secure reserve accounts to pay for any new services.


38 posted on 07/25/2013 9:39:01 AM PDT by shotgun
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To: Lou L
Yes, there was a union leader in the "Atlas Shrugged" cabal and he was a character who actually said what it was they were doing. Fred Kinnan.

"Only I'm not going to say I am working for the welfare of my public, because I know I'm not. I know I'm delivering the poor bastards into slavery, and that's all there is to it. And they know it too. But they know I'll have to throw them a crumb once in a while, if I want to keep my racket...."

39 posted on 07/25/2013 9:39:25 AM PDT by GeronL
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To: Billthedrill

“They’ll find the money, and it will be from somebody they don’t like. That’s what redistributionists do.”
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

0bama and crew are downplaying a bailout. 0bama and crew lie. Therefore, there will be a bailout by some other name. I’m betting with you.

http://finance.yahoo.com/news/feds-showing-little-enthusiasm-detroit-bailout-082050360.html


40 posted on 07/25/2013 9:47:13 AM PDT by shove_it (long ago Orwell and Rand warned us about 0bama's America)
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To: tflabo

New Orleans has going for it a very low cost of living, Memphis, nearly so.


41 posted on 07/25/2013 9:49:18 AM PDT by The Antiyuppie ("When small men cast long shadows, then it is very late in the day.")
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To: abb
The analogy I used was that the parasite outgrew the host and killed it.

That's good abb...

42 posted on 07/25/2013 10:03:27 AM PDT by GOPJ (Democrat dream: An America for everyone but Americans... freeper molson209)
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To: GeronL; Publius

Thanks guys...not that you mention it, and with the actual line, it does come back...


43 posted on 07/25/2013 10:04:30 AM PDT by Lou L (Health "insurance" is NOT the same as health "care")
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To: The Antiyuppie

The democrats ran out of the PUBLIC’S CRACK.


44 posted on 07/25/2013 10:07:48 AM PDT by spawn44 (MOO)
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To: GeronL
The liberals will want to merge the ‘burbs with Detroit to make them pay for everything.

Because I'm very familiar with it, they used this same rationale in Pittsburgh. The libs in the city were upset because all their tax base had moved to the suburbs. No one wanted to come downtown to shop or spend money--and why would they, with thugs and $20/day parking? Anyway, they claimed that the surrounding counties all benefitted from the city's centeral presence, and therefore, the residents in those surrounding counties should be taxed. Some called it a "donut" tax, as those counties formed a ring around Allegheny County, which is where Pittsburgh is.

45 posted on 07/25/2013 10:10:49 AM PDT by Lou L (Health "insurance" is NOT the same as health "care")
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To: Lou L

They will make up any reason if they think the sheeple will buy it


46 posted on 07/25/2013 10:12:50 AM PDT by GeronL
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To: Publius
Let the remaining citizens of the former Detroit incorporate smaller, more viable communities from that portion of Wayne County that was once known as Detroit

I was interested in what is actually on the ground as opposed to the reports that I have read so I took a virtual trip via Google Maps Street View. I was a little surprised to see some very well maintained neighborhoods that appeared to be occupied by homeowners that take pride in their places.

On the other hand, there are some neighborhoods that I didn't even feel safe touring though it was virtual.

I honestly feel bad for those who are at risk at losing a home that they truly care about and have to agree with you that the only answer is to diversify. The problem being the value in those neighborhoods that are still viable is exactly what the looters feed upon. The Looters won't be happy until there is nothing left. They are not concerned for their future and never have been. That is why they are in the position they are in.

47 posted on 07/25/2013 10:19:17 AM PDT by whodathunkit (DOJ + NSA + IRS = DNI)
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To: Publius

Thanks for the ping. What a peaceful thread :)


48 posted on 07/25/2013 11:17:13 AM PDT by upchuck (To the faceless, jack-booted government bureaucrat who just scanned this post: SCREW YOU!)
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To: Publius
so that there can be a vigorous discussion of its points and not its punctuation

Are you sure it's 'its'?

49 posted on 07/25/2013 11:20:08 AM PDT by Hoodat (BENGHAZI - 4 KILLED, 2 MIA)
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To: Hoodat

I’m not gonna take the bait. Not gonna do it...


50 posted on 07/25/2013 11:21:10 AM PDT by Publius
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