Posted on 07/28/2013 3:27:58 PM PDT by 1rudeboy
America’s 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 Detroit’s 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 isn’t worried about the city’s 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 educated—82% 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.
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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.
Thanks.
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.
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