Detroit has filed for bankruptcy. Is this a new trend?

[SandYFan]

Detroit filed for bankruptcy Thursday afternoon, becoming the nation's largest public sector bankruptcy. The move could slash pension benefits to city workers and retirees, and leave investors holding the city's debt with only pennies on the dollar.

http://money.cnn.com/2013/07/18/news...html?hpt=hp_t1

So let me see.

Democrat-controlled for decades.

The auto industry got massive bailouts.

And still the city fails.

If this isn't proof government cannot solve all problems, I don't know what is.

[Uncle Ted]

Detroit's population has fallen 28% since 2000. The unemployment rate, while down from a peak of 27.8% in the summer of 2009 -- when General Motors (GM, Fortune 500) and Chrysler Group were going through their own bankruptcies -- is still at 16.3%, nearly twice Michigan's statewide average.

Holy Crap?!?

[MarkGrace]

Taking my first trip to Detroit next week!

[Uncle Ted]

Taking my first trip to Detroit next week!

Return and report. Isn't MRD in those parts?

[frank ryan]

http://money.cnn.com/2013/07/18/news...html?hpt=hp_t1

So let me see.

Democrat-controlled for decades.

The auto industry got massive bailouts.

And still the city fails.

If this isn't proof government cannot solve all problems, I don't know what is.

Thanks for your insight. Everyone here thinks government solves ALL problems. Time to reconsider our world view. And I'm sure the economy has nothing to do with the city's troubles.

Taking my first trip to Detroit next week!

That sounds fantastic MG. I hope you scrapbook your adventure.

[MarkGrace]

That sounds fantastic MG. I hope you scrapbook your adventure.

That's what CS is for!

[Mormon Red Death]

Return and report. Isn't MRD in those parts?

Not much longer

Sent from my SGH-T999 using Tapatalk 2

[woot]

A relevant tweet:

"Conveniently enough, your personal political hobbyhorse happens to be THE exact cause of Detroit’s financial problems." @mattyglesias

[Jeff Lebowski]

A relevant tweet:

"Conveniently enough, your personal political hobbyhorse happens to be THE exact cause of Detroit’s financial problems." @mattyglesias

[woot]

I visit Detroit frequently, and the blight has become one of the main attractions -- e.g.: https://en.wikipedia.org/wiki/Heidelberg_Project

[Color Me Badd Fan]

http://money.cnn.com/2013/07/18/news...html?hpt=hp_t1

So let me see.

Democrat-controlled for decades.

The auto industry got massive bailouts.

And still the city fails.

If this isn't proof government cannot solve all problems, I don't know what is.

I think you have to distinguish between Detroit and San Francisco. Both cities employ radically blue policies, but their fortunes couldn't more different. San Francisco is probably always going to be perfectly fine and solvent. Detroit is rotting away and is obviously insolvent.

What's the difference? San Francisco is like Sweden -- if one looks at the productivity of the average citizen of San Francisco, it's pretty damned good and relatively homogenous compared to other large cities in this country. The city's beauty is peerless, it's weather is usually pretty nice (aside from the fog) and it attracts people that produce wealth. San Francisco can afford to enact pie in the sky policies because its population produces plenty of wealth to pay for it.

And then you have Detroit and we see the damage that some of those same policies have when you have a population that is not full of producers.

The US isn't Sweden, Germany or Switzerland. Policies that work in those places won't exactly work here. You have to make more negative assumptions about human nature and what providing the basic means for subsistence does to the character of people.

[old_gregg]

[pellegrino]

I think you have to distinguish between Detroit and San Francisco. Both cities employ radically blue policies, but their fortunes couldn't more different. San Francisco is probably always going to be perfectly fine and solvent. Detroit is rotting away and is obviously insolvent.

What's the difference? San Francisco is like Sweden -- if one looks at the productivity of the average citizen of San Francisco, it's pretty damned good and relatively homogenous compared to other large cities in this country. The city's beauty is peerless, it's weather is usually pretty nice (aside from the fog) and it attracts people that produce wealth. San Francisco can afford to enact pie in the sky policies because its population produces plenty of wealth to pay for it.

And then you have Detroit and we see the damage that some of those same policies have when you have a population that is not full of producers.

The US isn't Sweden, Germany or Switzerland. Policies that work in those places won't exactly work here. You have to make more negative assumptions about human nature and what providing the basic means for subsistence does to the character of people.

that's correct, but what everyone forgets is that in the late 70s and early 80s San Fran was really struggling. Everyone forgets what a dump of a city it was, especially after the hippies trashed entire neighborhoods. Let's not forget that for a lot of people the rising homosexual demographic was very undesirable. People weren't as enlightened as they are now. You know what they did that got the ball rolling toward a turnaround? They drastically cut property taxes, making it more reasonable for people to invest in real estate.

I guess my point is that economists have studied what ignited the boom in San Fran so many decades ago and they state emphatically that the cut in property taxes was a major contribution to it.

[Mormon Red Death]

From MSN money on why Detroit is in such despair.

1. Stark poverty. It's the poorest large city in the country, with more than a third of people living below the poverty line.

2. Crime is everywhere. It has the highest crime rate of any large U.S. city. In a recent survey of the 25 most dangerous neighborhoods in America by NeighborhoodScout.com, Detroit took the top spot.

3. People are fleeing. Some 250,000 people moved away in the last decade, cutting the population to about 700,000. Many of those leaving were in the upper and middle classes. Back in the 1950s, in Detroit's heyday, the population reached 1.8 million.

4. The city feels abandoned. When you have that many people leaving so quickly, taking valuable tax money with them, the impact is obvious. There are about 78,000 abandoned and blighted structures, and 40% of the city street lights are dark, Reuters reports. Check out these photographs of Detroit by The Observer that show just how badly the city has deteriorated.

5. The police force is barely there. Detroit police take about 58 minutes, on average, to answer 911 calls.

6. There isn't enough medical help. Only a third of the city's ambulances even work.

7. People aren't paying taxes. Only 53% of homeowners actually paid property taxes in 2011.

8. City officials racked up the debt. Detroit is carrying a crushing $15 billion in debt. It needs to pay $246 million a year on that debt -- a whopping 20% of its general fund budget.

9. No one is loaning it any more money. Detroit couldn't get money from anyone to keep going -- at least not at normal interest rates.

10. Trash is piling up on the streets. The city couldn't repair garbage trucks that had mechanical problems. And so the trash sat out uncollected for days, and would sometimes get collected as late as 11 p.m.

[Uncle Ted]

One has to wonder if Detroit will receive federal aid or if Obama will issue a "drop dead" like Ford did with New York. So far the message from the federal government has been "drop dead".