Detroit, a microcosm of the failure of America
During the 1940-1960s Detroit Michigan was a booming city, with a population just south of 2 million and the title of fourth largest city in America. Detroit, the home of the American automobile and the founding address of Motown. Well, those were the hay days when living was easy. Politician and local government salaries were in direct correlation to those demanded by the United Auto Workers. Life was good.
Then the regression started. The auto industry began to migrate from Detroit, finding homes in the South and outside the bounds of corporate policies of American shores. Demands by the EPA and other Government agencies began to take their toll. The music industry found homes in California and New York, residents in the once bustling metropolis began migrating with the jobs. In order to retain the "way of life" Democratic leadership began cutting deals with unions, putting off cash dispensed today for payments in benefits tomorrow.
Detroit began taking out extensive loans, essentially against its tax paying citizens, to keep the city alive. Most of this taxation and collateral was based on real estate. When the real estate market met its decline in the late 2000's, so went Detroit. Falling over a localized fiscal cliff of unprecedented collapse.
Throw in a Mayor who was convicted of racketeering and embezzlement, and you have more than the perfect storm.
Enter a new Mayor, making promises to "turn around" Detroit. But, like most politicians, he made promises he couldn't keep. He then was ordered by the Governor of Michigan to come up with a plan. The Mayor did, however, it took so long to draft that it kept needing changes. Now Detroit sits on the cusp of complete bankruptcy. With the Republican Governor of Michigan breathing down the neck of the Democrat Mayor.
America should take note of this. If Detroit does officially collapse under the weight of promised debt, it will mark the largest City bankruptcy in the History of America! The practice of leveraging debt, betting against risk, hoping for change, hoping for promise and taking out collateral on the citizens, ends badly.
Sad but true
Then the regression started. The auto industry began to migrate from Detroit, finding homes in the South and outside the bounds of corporate policies of American shores. Demands by the EPA and other Government agencies began to take their toll. The music industry found homes in California and New York, residents in the once bustling metropolis began migrating with the jobs. In order to retain the "way of life" Democratic leadership began cutting deals with unions, putting off cash dispensed today for payments in benefits tomorrow.
Detroit began taking out extensive loans, essentially against its tax paying citizens, to keep the city alive. Most of this taxation and collateral was based on real estate. When the real estate market met its decline in the late 2000's, so went Detroit. Falling over a localized fiscal cliff of unprecedented collapse.
Throw in a Mayor who was convicted of racketeering and embezzlement, and you have more than the perfect storm.
Enter a new Mayor, making promises to "turn around" Detroit. But, like most politicians, he made promises he couldn't keep. He then was ordered by the Governor of Michigan to come up with a plan. The Mayor did, however, it took so long to draft that it kept needing changes. Now Detroit sits on the cusp of complete bankruptcy. With the Republican Governor of Michigan breathing down the neck of the Democrat Mayor.
America should take note of this. If Detroit does officially collapse under the weight of promised debt, it will mark the largest City bankruptcy in the History of America! The practice of leveraging debt, betting against risk, hoping for change, hoping for promise and taking out collateral on the citizens, ends badly.
Sad but true
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