Posted on 08/16/2013 11:03:40 AM PDT by SeekAndFind
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.
>>> New Report: Detroit’s Bankruptcy Marks the Tip of the Iceberg
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.
>>> Read More: Detroit Today, Illinois Tomorrow
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.
There’s an author who’s written a book — author and title escape me right now — who has been contending that municipal bankruptcies are the wave of the future. I seem to think she’s a market analyst or economics professor or something but the few times I’ve seen her on tv her math is quite compelling, and when public union employees negotiate their contracts they should understand that the city can promise them anything but good luck collecting on those pensions at retirement if the town goes bankrupt in the meantime.
The difference between Detroit (or Michigan) and the USA -— the latter can PRINT as much money as she wants. The former can’t.
The definition of insanity. Doing the same thing over and over and expecting a different result. The liberal left in control of these government agencies are insane. Do not expect a different result.
The liberal left wants blacks to be in control of black cities. But not cities where liberal whites live. They’ve got a token black puppet in the white house to show just how pro-black they are. The blacks in the house are token idiots who vote the way they’re told and the white democrats make fun of them behind their backs.
Then every election the white democrats say “Boy! Get over here and I’ll give you a piece of candy.” And they all run over. Sadly, Robert Byrd was right. Lots of white n.....s run over with their hands out, too.
Nah....just keep printing money like there’s no tomorrow. Put the AC on 68 and let the good times roll.
I don’t want to hear any more about chickens roosting and bills coming due...
Detroit’s Per Capita Obligations Pale
RACIST!
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