For Fifty years, Democrats have been running
Detroit,
and for Forty years it has been obvious to conservatives that Detroit
would go bankrupt if the government did not change its ways. The government was
running up huge bills to the workers for pensions and health care. Detroit
was the poster child of bad government.
Unsustainable demands from its 48 unions gradually drove out private
industry, as government became the largest employer. Its shrinking tax base can
no longer support the massive pension debt obligations and still provide a
minimum level of city services. Nearly half of the city’s debt is to
under-funded pension plans and retirees.Mitt Romney presciently warned in 2008 that if the government bailed out the automakers, it would ultimately destroy Detroit. “Without that bailout, Detroit will need to drastically restructure itself. With it, the automakers will stay the course — the suicidal course of declining market shares, insurmountable labor and retiree burdens, technology atrophy, product inferiority and never-ending job losses. Detroit needs a turnaround, not a check.” Obama and the Democrats in Congress didn’t listen and chose to bail out GM and Chrysler.
Now, Detroit’s government is bankrupt. Fiscal conservatives have said for years that this was inevitable but they were dismissed as crackpots.
Much has been said about the cause of Detroit’s decline over the past 50 years. Some believe much of the reason may be racial tensions and gang violence. The exorbitantly high violent crime rate combined with a mass exodus of residents has certainly contributed to Detroit’s destruction. In 1950, Detroit was the fifth largest city with over 1.8 million people. Since then, the population has plummeted to just over 700,000 people in 2012.
These are merely symptoms of the real problems, which are bad city government and extremely high unemployment. As for the bad government, well DUH, that’s what Democrats do. And as for the high unemployment, that’s what labor unions like the UAW do.
Take a look at these employment statistics. Of the 700,000 residence, 560,000 are eligible to work (aged 16 and over), but only 224,000 Detroit residents do work. Of those workers, 34,500 have government jobs. There are 257,000 who don’t work and are NOT LOOKING for work.
It’s not surprising then to find out that Detroit’s “average monthly income [is] barely $1,200 before taxes; a fifth of the population [is] in poverty; the official unemployment rate is 30 percent – the real rate [being] much higher.” Detroit is stricken with a 40% poverty rate, and about 35% of its households are on food stamps. And because so many productive citizens have left the city, out of 363,000 housing units, over 99,000 are vacant.
Unlike other cities which found new industries to replace their failing ones, Detroit never moved on. Instead, the city’s reaction to the shrinking tax base was to build fancy new buildings, which only dug it deeper into debt. It became difficult for Detroit to provide basic services such as law enforcement and trash pickup due to the escalating costs of union contracts and benefits, especially health care, which became worse under Obamacare. The city of Detroit and its school system are now the biggest employers in the city, dwarfing GM and Chrysler. Yet the city is now supporting more retirees than it has workers, with 18,000 retirees to the city’s 10,000 active public employees.
Detroit has been operating in the red for nine years, and in 2012 its fiscal deficit was $327 million. The city owes $18 billion to over 100,000 creditors, the biggest ones being pension systems. There are around 80,000 blighted or abandoned buildings. Forty-seven percent of Detroit’s taxable properties were delinquent in 2011, according to Reuters. Half of the street lights don’t work. Schools have been closing, and only seven percent of the city’s eighth graders are proficient in reading. The average police response time is 58 minutes, compared to the national average response time which is 11 minutes. Detroit has the highest crime rate in the U.S. of large cities, nearly three times the rate of Cleveland. Only 8.7 percent of violent crimes are ever solved.
There has been plenty of corruption contributing to the fiscal crisis. Mayor Kwame Kilpatrick was forced to resign in 2008 over a sex and perjury scandal that cost the city almost $9 million.
Other big cities controlled by the Democrats like Chicago, Oakland and Santa Fe are now headed towards similar disaster, buried under unsustainable pensions, some up to five times their operating revenue. Chicago just took a steep credit rating hit, as Moody’s lowered the city's credit rating by three levels. Since 2010, 23 cities and municipalities have declared bankruptcy. The mayor of Detroit, Democrat Dave Bing, says there are over 100 major urban cities that are going down the same path as Detroit. Steven Luetger, senior managing director of fixed income for Mesirow Financial Holdings Inc., observed that whether it’s Detroit or Chicago, “there doesn’t seem to be any sense of cost discipline in either city.”
Obama warned voters if they voted for Romney, Detroit would go bankrupt. He tweeted on October 17, 2012, “When Gov. Romney said we should just let Detroit go bankrupt, we said thanks but no thanks.” Looks like he was right, I voted for Romney, and now Detroit is filing bankruptcy.
Obama ran on a platform of hope and change, promising blacks he would make them better off. In reality, they’ve been hit the hardest by disastrous liberal policies. Detroit is going bankrupt, contrary to Obama's spin last fall. The biggest victims of the left’s disastrous mismanagement of big-city governments have been blacks - eighty percent of Detroit is black. The left uses blacks and makes them worse off than they were before.
Detroit is our canary in a coal mine; if the left can ruin a city like Detroit with no consequences and a license to do it again, it is just a matter of time before the misery spreads to all our large cities controlled by Democrats. Americans who value their standard of living should see the writing on the wall and leave big Democrat-controlled cities for more conservative states. The country cannot afford overly generous pensions to government employees, and until the pensions are brought in line with the private sector, Americans in large cities controlled by Democrats will suffer – and may even spread their misery to the rest of us if the federal government bails them out.
This is a perfect example of socialism. Detroit today is the United States in a few years if Democrats remain in power.
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