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Posted on 07/28/2013 3:27:58 PM PDT by 1rudeboy
Americas biggest-ever city bankruptcy starts to roll
LARRY EDWARDS sits patiently in his wheelchair outside City Hall, waiting for a lift home. He worked as a gardener at Detroits Belle Isle Park between 1988 and 2011. That was before a knee injury, and then a stroke, forced him to retire. He remembers how beautiful the island was before people started to move out of town and the crooked politicians arrived. Mr Edwards will be 50 in December. The city already pays one-third of his full pension. He says that, since his pension is protected by a contract, he isnt worried about the citys bankruptcy. But he should be.
By filing for Chapter 9 on July 18th, Detroit sought protection from all its creditors, including pensioners like Mr Edwards. Nothing will change for the next six months. But Kevyn Orr, the emergency manager appointed by the governor of Michigan, says future and present retirees will see cuts to the unfunded portions of their pensions. Health-care benefits are also likely to be squeezed.
Detroit is the largest American city ever to file for bankruptcy. Its long-term debts are estimated at $18.2 billion, or $27,000 for each resident. Of this, about $9.2 billion is in unfunded retirement benefits. Since 2008 the city has spent around $100m more each year than it has brought in. Recent attempts to fix its finances have been thwarted by a feeble economy, a shrinking population and rapidly increasing legacy costs. Property-tax revenues have declined by 20% since 2008, and income tax by 30% since 2002.
The crisis has been brewing for decades. Fifty years ago the city was rich. GM, Ford and Chrysler cranked out nearly all the cars sold in America. Detroit was home to 1.8m people. Today only 700,000 remain. Many are poor and poorly educated82% have no more than a high-school diploma. The city sprawls over an unmanageable 140 square miles (enough to swallow Boston, San Francisco and Manhattan). Delivering services to barely-populated neighbourhoods would be hard even if the city government were well-run, which it is not.
I don’t reckon something that is dead can be mended... it should be dissolved.
Not under current management.
Did I read that they building a new hockey stadium?
Economically Detroit is easy to fix. Slash taxes and regulation.
Politically its going to take a wide ranging round of indictments.
Socially it will take solid conservatives (Mostly black to begin with) promoting freedom in Detroit.
Basically its a matter of conservatives fixing the place through free market means or democrats will “fix” it with more of our money.
Faith, Family, and Free markets.
Can liberals admit their governing philosophy inevitably leads to bankruptcy?
I must know what time period we talking about before I can answer. (In the near term, No. In the very long term, probably not, but maybe.)
It certainly can, but accomplishing such a task will require some changes.
Foremost, Michigan must become a Right to Work state and end closed union shops for industry and government.
Second, local business regulation and taxes must be drastically reduced.
Third, the government, insurance industry and safety advocates need to get out of designing cars.
Fourth, the EPA must streamline its Superfund projects and ramp up development of Brownfields.
Not a comprehensive list, but a good start.
Buy to the sound of gunfire
FOR visitors expecting broken windows and muggers, downtown Detroit is a pleasant surprise. Busy food stands serve diners on lime and orange picnic benches, with live music provided by a classical guitarist. After lunch you can play a free game of outdoor table tennis, borrow a bicycle or take a stroll on the lovely riverfront.
The city may be broke, but some parts are reviving. Property is so cheap that Detroit still attracts dreamers. Perhaps the most prominent is Dan Gilbert, the chairman of Quicken Loans, a mortgage provider. In 2010 Mr Gilbert moved Quickens headquarters from the suburbs to the centre of town. Another of his companies, Rock Ventures, owns or controls over 30 buildings in the area, which locals light-heartedly call Gilbertville. Mr Gilberts firms have invested around $1 billion in downtown Detroit and employ some 10,000 people there.
OK here’s a thought experiment: Split the city in two chunks, just like Berlin...maybe run a wall right up Woodward Avenue.
Put a Conservative governor in charge of one half, and a Liberal in charge of the other. Each would have complete authority to do as he sees fit with 50% of the tax revenue. No city council, no state intervention, he’d have similar powers to the Special Masters who have been put in charge of schools by the federal gov’t.
Come back in 5 years and compare the two sides. Then tear down the wall and the winning side takes over the other. Or wait 10 years and the correct outcome will have occurred all by itself.
Bankruptcy: what bankruptcy? $444 million for the Detroit Redwings. Obama-cash no doubt.
I don’t care, I was always more of a Stax/Volt guy, myself.
Could Nagasaki or Hiroshima be mended on the first of September, 1945?
Somebody would WANT to mend Detroit. Nobody is stepping up.
At least nobody with a viable plan.
Raze the entire region to the ground and plant it to buckwheat. Then let the natural rules of economics determine if there should even BE a city there, and allow it to develop according to that economic model.
Resurrecting Detroit is akin to going into a Third World country and trying to bring it up to developed world standards. The city needs far more than investment to bring it back.
And where will those conservatives come from? The vast majority of the residents don't believe in free market principles and conservative values. They believe in a culture of dependency and big government. They accept widespread corruption.
If it weren't for the federal government, Washington DC would be another Detroit.
You are correct sir, not under the rats, and even if Detroit can recover, it might take a generation or more, unless Odumbo bails them out, then they will continue to kick the can down the road, hence, back to square one.
Detroit has far too few taxpayers and there is no motivation for new taxpayers to move in, so, no.... I don’t think Detroit can be saved.
Still sounds a little coo-coo to me...but what do I know?
Does anyone care?
Looking at the above linked city data gives a good perspective of Detroit's problems. The city has been in a downfall for a number of years.
They need RoboCop.
Of course the only thing that can work is a forcible military takeover.
Detroit can be mended if Detroiters choose to mend it. That means quit voting 97% Democrat, quit voting for progressives, get the schools back, and stop allowing major crimes against citizens and property.
It would require shrinking the bureaucracy to the absolute core, so probably not.
That was pretty much done. Oakland County was Republican (until Detroiters moved there and brought Detroit with them). Detroit was and is democrat.
Wha’ happened to all them rich ,rich black folk, blowin’ the ‘Wall of Sound?’ Oh, da’s right. They wised up.
They could swear off chocolate?
My company had a similar experience, albeit on a much smaller scale.
We bought a couple of cheap apartment complexes in a high crime, dilapidated area, close to a hospital district. The premise being, people working at these hospitals would want to live close to work and be willing to live in the area if they could get to a “haven” apartment.
The cost was huge...renovation, security gates and personnel, tennis courts, work out rooms and biz centers. All I can say...it was a total failure. One I had tried to fight tooth and toenail.
For the 2010 American Community Survey, median household income in the city was $25,787, and the median income for a family was $31,011. The per capita income for the city was $14,118. 32.3% of families had income at or below the federally defined poverty level. Out of the total population, 53.6% of those under the age of 18 and 19.8% of those 65 and older had income at or below the federally defined poverty line.
“Can liberals admit their governing philosophy inevitably leads to bankruptcy?”
No more than Stalin would admit that his collectivization plan starved millions of Ukrainians. He blamed everyone, up to and including his victims themselves. He was never wrong, which is symptomatic of a deeper psychological pathology.
The hard truth is that Detroit can’t be fixed until the citizens of Detroit are fixed. You can give them more money and they’ll just burn through it. You can jail the criminal politicians, and they’ll just elect different crooks. You can have portions of Detroit that are fine, but you’ll have to build elevated highways to get to them. The only true cure is to change the people. Without that, the best that can be done is to destroy the Democrat party so they don’t have the means to spread their bad habits.
Not all conservatives are a bunch of do nothing whiners and will actually try to prevent the democrats from “fixing” Detroit with your money.
Not all conservatives are pathetic wimps.
The problem from what I read is socialism/liberalism and an overabundance of entitlement citizenry (and no I don't mean anything racial...entitlement folks come in all colors and many are unionized).
The turnaround team should try to get Detroit classified as a "free trade zone" and exempt from the minimum wage laws and unions.
What Detroit has going for it is desperation and name recognition. Otherwise it is no more important than pastureland in Iowa or desert in Arizona (that said, its ports--water, rail, and air--don't hurt).
As a final note, Detroit doesn't need a bankruptcy lawyer to handle its turnaround.
It needs a turnaround guy who is a visionary at clearly selecting a course of action and who is also a mean as a snake manager capable of making and implementing tough decisions (actually, the toughest decisions).
This isn't a matter of being a wimp or not. It is a matter of common sense. Detroit is no better than a third world country. And it is just a harbinger of things to come with many of our urban areas being in the same condition. St. Louis and Cleveland are headed in the same direction. We don't have the money to bail these places out.
Yes ... with bulldozers to scrape it flat.
“The city needs far more than investment to bring it back.”
Very true! The other reality is that there are literally dozens of “Detroits” within the confines of the United States. I find it interesting (but not surprising) that FUBO wants people to “move to the cities.”
The only rationale is that control is easier. The truth is that our major cities are home to a host of conditions that doom them to becoming “Detroits” sooner or later. We have allowed “ the world’s huddled masses” to “huddle” in our cities sucking the financial guts out of them. There are just too few truly educated minorities as a percentage of their entire groups to effectuate the changes that need to happen in the cities. Sad for them, but sadder for those of us who have created the wealth that they are consuming. Unless there are draconian changes they will “win.” White America birth rate 1.6 per couple, but when you “add in” Blacks and Hispanics it rises to 2.11, So you know who’d doing the breeding don’t you! We are headed toward a minority majority with poverty for all! I am glad I lived in this generation, but I am so sad for my children and now their children.
You don't think being 83% black has anything to do with the decline of the city? Or that reviving it will have to address that demographic? Take a look at the demographic history of the city. You can trace the decline of the city with the change in demographics. Politically correct or not, you can't discuss the collapse of Detroit without explaining why there has been such a radical change in the racial makeup of the city.
$27,000 and add that to the $52,000 they owe Obama.
Boy, are they screwed.
"International migration is projected to surpass natural increase (births minus deaths) as the principal driver of U.S. population growth by the middle of this century, according to three new series of population projections released today by the U.S. Census Bureau. This scenario would mark the first time that natural increase was not the leading cause of population increase since at least 1850, when the census began collecting information about residents' country of birth. The shift in what drives U.S. population growth is projected to occur between 2027 and 2038, depending on the future level of international migration."
“Socially it will take solid conservatives (Mostly black to begin with) promoting freedom in Detroit.”
cripplecreek, do you really think (enough of) such people can be found?
Sounds good, but the demographics will kill it. Until the demographics change radically, so that it is not run by corrupt dems, it is hopeless. And such a huge change in demography is highly unlikely.
Yes. They only need to know there will be conservative support.
For instance in June, the Americans for Prosperity hosted the Frederick Douglass Junteenth celebration in Detroit in cooperation with the Union Conservatives. Reverend CL Bryant was a keynote speaker and has made at least two more trips to Detroit since. For those who are unaware Rev. Bryant was the primary driving force behind the Runaway slave movie. Tea Party types and conservative republicans are actively working on free market ideas to help solve the health care crisis of city retirees.
Personally I would inundate the city with every black conservative across the spectrum. I don’t like it being race based but I do think its the only way to break through. I would bury the city under conservatives like Mia Love, Allen West, Herman Cain, Ben Carson, Alfonzo Rachael etc. There are also local conservatives in Detroit like Rick Ector.
You’ve got to go at it like a war and unlike the mideast folly, this is a war worth fighting. You go at it with everything you’ve got. You break the tax and regulatory dam and you will soften up the ideological defenses. The indictments of city officials will likely continue.
The simple fact is that the whole country is going the way of Detroit so what better place to develop our strategy going forward. Detroit was once a republican city and its high time we took one back.
Even if they could be found, they are never going to be elected in Detroit.