Skip to comments.A Drunk Trying to Make the Next Lamp Post [Hey, Jim Wallis, look at Detroit]
Posted on 07/20/2013 8:56:28 AM PDT by rhema
The old Bobby Bare song, Detroit City, has a refrain that centered on the desire to go home. Unfortunately, everywhere else is turning into Detroit City. Pretty soon there will be no home to go to.
Detroits bankruptcy, announced yesterday, gives us an opportunity to go over a few fiscal realities, always a good idea if you are careening toward a whole series of fiscal reality checks.
The first thing we must grasp is that we are dealing with levels of municipal debt, state-level debt, and federal debt, that mean a necessary default is coming. If our problems are left untended, we will default. If we wake up in time, and address the pending problem, we will default. This is another way of saying that every genuine solution to the problems created by our fiscal irresponsibility will be a form of default. The only solutions now are defaulting solutions.
The only thing we dont know is what kind of default it will be. The only thing we dont know is who the unlucky victim of our defaulting will be.
Government does not make wealth. If government has wealth, then this means it was taken. The only way that the government can acquire the means to pay its obligations and debts is by taking it. The only question left before the house is who will they take it from? There are a limited number of options.
When a politician says that we cannot allow our government to default on its solemn obligations, he either believes what he says, and is a fool, or he knows what he is saying is false, and wants us to believe that we must avoid Default A, which is what he is really talking about, and must select from defaults b, c, d, and e, which he does not really consider defaults technically, because the people who are going to get hosed by them are not part of his constituency.
The government does not make, and in order to have, must therefore take. Here are the basic ways in which such a taking can happen. The government can wage war on other countries, and take from them. The government can raise taxes, and take that way. The government can debase the currency, and take that way. The government can run up a big debt which it finds itself unable to pay, and take that way. And of course, given the realities of the ongoing political circus, the government can stagger between these options, like a drunk trying to make it to the next lamp post.
Beware of those reforms that hide the reality of the defaulting. Those kinds of reforms are probably the best way of proceeding, but only if they are honestly embraced as the least destructive way of defaulting. But dont hold your breath. The government lies. The government cheats. The government welshes. The government steals. The government defaults, and hides it.
For example, if the retirement age for Social Security is extended by two years, this does make the program viable longer on paper. It does this by unilaterally changing the terms of a contract by defaulting. It may be better than doubling down on the current lunacy and having the whole thing go up in a sheet of flame, but it is not better because it isnt defaulting. It is just as much a default, but it may be less damaging to the recipient.
If you pay your creditor 50 cents on the dollar, that is a default. It does less harm to him than paying him 10 cents on the dollar, which in its turn is not as bad as paying him nothing at all.
Detroit is now defaulting on its bond holders, its pension holders, et al. Look at it straight on it is hard to make out, but a line has formed and we are trying to make out who is next. Is it California? Illinois? New York? There are municipalities in there too. And if this spectacle becomes too grim, and a demand arises for the federal government to do something, this will just be an example of people opting for the coast-to-coast sheet of flame default, instead of the piecemeal approach.
One last thing. I would like to address a few words to those evangelicals who have been seduced by leftist economics, or who are in some way flirting with leftist economics. You may have cannonballed into the deep end, like Jim Wallis, or you may just be sidling sheepishly in that direction, with some cover provided by distributist literature. You think that the language of compassion is more biblical, and the idea of communitarian sharing makes you feel warm all over. You think that businessmen who know how to add and subtract are those who are in the grip of mammon-lust. You dont like the hard lines of clear thinking, and the blinking sums on their calculators do nothing but harsh your mellow.
Do me a favor, and look at Detroit. Look at the failure of all the compassionate nostrums. Look at the collapse of real integrity. Look at the grasping and demented idiocy of the unions. Look at the abandonment of governments true functions. Look at the wreckage of human lives. Look at the ruin of a once great city. Look at what aching greedlust does. Behold the handiwork of your compassion.
Look at what mammon in sheeps clothing can do.
Just think. Chicago is $97 billion in debt and just got a credit downgrade.
Chicago, another cesspool of corruption. They’re next. Should we start a pool?
You must not Dishonor the Chimp. Err.. Chief.
What did you think I meant? Dubya?
These cities large and small have some astounding debt. People tell me that those cities have a tax base to support it but if you’re $100 billion in debt, your tax base isn’t doing a very good job of supporting it.
Our cities are trillions of dollars in debt. There is probably a trillion dollars in municipal debt in the northeast alone.
Detroit voters got what they wanted. Now their taxes can rise to pay for it.
Leave us taxpayers outside Detroit out of the problem.
Well, that’ll be a good trick or a very long stagger....I’d bet all of the copper wire and probably a lot of the light posts have been stolen and sold out for scrap...hahahahahahaha
But their Mayors, their staff, their “friends” bask in the constant shower of Money, Money and MO Money. They don’t give a whit’s damn about the city’s future, never did. Get some bodyguards, a limo and driver, a big ole fat paycheck and all you can steal under the table, put your a$$ in a nice mansion the city unknowingly bought for you, stash some cash and what the hell do you care.
America’s URBAN cities since circa the 1970s....
I thought the song “Detroit City” or “I Wanna Go Home” was about returning to the south.
Aptly applies here.
I'm betting on Illinois, I read recently that we are #1 in unfunded obligations, even ahead of looney California.
You go, Illinois!
The last I heard, Suze Orman was saying, "buy muni bonds". Of course I quit watching her about a year ago.
Only fair sized cities issue muni bonds. How many "fair sized cities" are not run by democrats?
This guy summarizes Detroit well. And OBama will bailout Detroit.
Geez, will somebody please start identifying the common denominator:
Detroit goes bankrupt - Democrats
Chicago going bankrupt - Democrats
Illinois going bankrupt - Democrats
California going bankrupt - Democrats
Social Security going bankrupt - Democrats
The US 16 trillion in debt - okay, let’s see if anybody can figure it out
It past time to cut off the "bar tab" for the "Takers".
Socialism does run out of money, every time.
Hard to tax an EBT card.
We could use Detroit as a live fire range for Military Operations in Urban Terrain (MOUT) and an impact area for MI Army National Guard artillery and Air National Guard close air support training. Otherwise, just nuke Detroit and turn it into a national shrine for the nut case Environmentalists.
of course Obie will bailout DET-roit and then cities and states across America will demand the same and he can INVEST trillions and trillions of deflating dollars into vote buying. Democrats will be hailed as heroes for the 2016 election - our last before the Great Fall
“of course Obie will bailout DET-roit”
Perhaps, if so, he can point to the NY City 1975 precedent and several others.
During the 1970s, New York City became over-extended and entered a period of financial crisis. In 1975 President Ford signed the New York City Seasonal Financing Act, which released $2.3 billion in loans to the city.