Posted on 08/05/2013 5:36:13 AM PDT by IbJensen
Detroit is the poster child for economic decline. The city’s policies and politics over the past half-century should serve as a “do not” guide for policymakers across the country.
There’s a great deal lawmakers in Washington can learn. The first is understanding that Detroit’s demise was the result of big-government, liberal policies promoted by self-interested politicians and coercive public employee unions.
In the wake of America’s manufacturing decline, Detroit enacted policies that drove out businesses and residents. Rather than reduce the size of government as its population shrank, the city instead sought higher levels of government spending. City leaders acquiesced to unions by increasing employee benefits and ceding control and flexibility over employees.
To pay for it, Detroit continually increased taxes and engaged in prolific borrowing when the tax increases did not close the gap. And yet, despite the growth in government taxes and debt, Detroit’s citizens experienced ever-declining city services, the most troublesome result of which has arguably been the steep rise in crime.
A federal bailout of Detroit is not the answer.
If Congress were to step in to protect any of Detroit’s creditors—be they pensioners or bondholders—it would create an untenable moral hazard. Believing that the federal government would step in to help them, troubled state and local governments across the nation would have no incentive to enact reforms, and unions and workers would have no incentive to accept them.
Moreover, a federal bailout of Detroit or any state or local government would impose the costs of one city’s fiscal recklessness on the taxpayers of other, more responsible states and localities.
Perhaps most important, though, the federal government is in no fiscal position to be providing bailouts.
As significant as Detroit’s debt is, the federal government is in far worse shape. In fact, as the chart above shows, the federal government’s debt and unfunded obligations are more than eight times that of bankrupt Detroit.
Detroit’s spiraling decline is a tragedy. Lawmakers in Washington should learn from Detroit’s mistakes and rein in big government now before it’s too late.
Public sector unions need to be outlawed!
Fixed.
Detroit will gain much needed relief (and pain) thru bankruptcy, but it won’t be able to successfully rebuild because it will start over with all the same characters in place.
Detroit has too few public sector taxpayers and while bankruptcy will shed debt and cut spending, it won’t produce any new taxpayers.
And, because of Detroit’s social issues, crime, high taxes, blight, poor education, no new taxpayer will fill the gap.
oooops, I meant private sector taxpayers.
Public unions + free sh*t army + long term democrat rule = bankruptcy and ruin for any city
Actually not. You can only learn if you don't already know everything, and obviously 0 and his accomplices already know everything. Every time his policies make things wors he doubles down with our money. Green Jobs? Just because there aren't any doesn't stop him from squandering hundreds of millions on training for them. Solar energy? Can anyone spell Soylndra? Half a billion there to pay off campaign contributors.
Politicians and bureaucrats NEVER learn anything good from the past. The two best things about government work
No matter what happens, it will be more income redistribution from the productive members of society to the slackers.
Can Barry see Detroit form his window?
I believe I stated this several times on other threads or postings, but Detroit is effectively dead. Perhaps the Chinese will buy it and turn it into a gigantic restaurant, but the boat to Boblo will never sail again. It does stand a chance to be rechristened the Mecca of America.
Goodbye Carl’s Chop House, goodbye Little Harry’s, Goodbye J. L. Hudson, Goodbye old Tiger Stadium and so many others.
Had this argument this weekend. Will never happen unless the Chinese Army airdrops a couple of batallions into Detroit with tanks, etc. Face it, the only reason why the "emergency manager" hasn't be deposed is because he is black. If he was Chinese, he would be heading for the hills. The people who ran Detroit into the ground will NEVER give up power without violent force. They are the 3rd world dictators like Noriega we have dealt with in the past. ZERO difference.(pun intended)
Black and white flight.....Its not PC to bring up the truth. I was born and raised in Detroit until I married in 1957. At that time we couldn't afford a home in Detroit and moved into a new sub and ours house cost 13,900. No home in Detroit could be bought for that low cost.
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