5 reasons Detroit is broke
The new emergency manager has taken his first hard look at the books, and his report shows a city that's almost beyond repair.
The city's new emergency manager, a bankruptcy lawyer just two months into the job, issued a scathing report Monday detailing how bad things have become.
The verdict? Detroit cannot stay on its current path and survive, and its financing and operations must be completely restructured. The city is about to run out of cash.
There's a long list of reasons Detroit is broke, but here are some of the biggest ones:
Everyone moved away. Detroit was at one time the fourth-largest city in the country, but now it has more than 100,000 vacant lots and buildings, CNN reports. Set aside for a minute the problems of blight and crime that creates. The empty buildings have drained Detroit's revenue from property and income taxes. Check out the GooBing Detroit Tumblr for stark images of how far, and how fast, the city has fallen.
So Detroit had to borrow. And borrow and borrow. Now it's 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.
And it can't borrow more. Surprise, no one wants to lend money to a city on the verge of bankruptcy. The few who are willing to lend will exact a huge cost. A tax-exempt city general-obligation bond maturing in 2015 is trading at an 8.5% yield, Bloomberg reports. That's very expensive for the city.
Too many employee unions. There are 48 employee unions in the city, and there's no way Detroit will reach consensus with all of them.
Too many pension obligations. Retirees outnumber current employees by more than 2 to 1, and retiree benefits are one of Detroit's biggest bills. Last year, more than 8,000 former police officers and firefighters collected an average of $30,000 each, The Detroit News reports. Nearly 12,000 retired city workers or their spouses collect about $19,600 each year.
More on moneyNow
- The black market's hottest product: Food
- Hollywood banking on boffo summer box office
- Ex-Enron workers: Skilling should serve full term
Just shows what happens when the government can't print money or tax enough Republicans to supports the freeloading democrats.
The Free Ride is over.....Level the city and make it farmland.. Let the State take over the pensions..Is there a choice??...Thank You Unions for Destroying another great American Icon...Whose Next???
Once the hub of our industrial power. Today Detroit is a soulless city filled with apathy, mediocrity, no hope and no change. Prosperity once flourished here, today poverty is its epitaph. The home of one of the greatest captains of industry, Henry Ford, has been reduced to a populace embracing dependency.
As Ford Motor Company clings to its sovereignty, it stands alone as the only real surviving icon of a once thriving industry. The Big Three has been reduced to a survivor, a foreign entity and a nationalized embarrassment. The auto industry that we once dominated struggles as the populace has been minimized by corruption.
A once proud city of millions is a wasteland with no future in sight.
Liberalism/Progressivism has left its fingerprint squarely on this once great city. Its irrational social and economic justice propaganda has been exposed for the hoax it really is. A virtual circus of Liberal mayors, city council members and sundry administrators has summarily destroyed Detroit.
A consortium of Liberal ideology and union thuggery has reduced a major American city to insignificance. The auto-capital of the world now competes to be the murder capital, a dubious honor.
As this city prospered from its roots in the Underground Railroad to an industrial force unseen before, the slow insidious infiltration of Liberalism has reduced it to chaos. Mustangs, Corvettes and Barracudas once dominated the landscape, today rusted shells and empty dreams litter the streets and neighborhoods.
An illiterate populace now predominates and its only hope is more dependency. Poverty strips any ambition and possible improvement as the Liberal solution is always, more government that further enslaves them. From Coleman Young to Kwame Kilpatrick, the typical Liberal "Bread and Circuses" promise continues. Any realistic attempt at helping the despondent masses is attacked as racist, and instead, more taxpayer money is demanded with no results.
It will take decades to reform this once great city, if at all. The population must be assured that the only way out of poverty is not through more welfare but through education. The prevailing mentality of Liberalism/Progressivism must be replaced with pride, ambition and exceptionalism. Liberalism loves crisis as it hands out more, but never enough. It claims it wants to help but it only makes it worse. It promises hope but refuses real change. The status quo is demonized yet it is continued to maintain its manipulative grasp of the unwashed masses.
It’s sad to see a once prosperous city with hard working good Americans to be so manipulated by an ideology built on more of the same. Until the people throw down the Liberal/Progressive chains that bind them and denounce its lies and corruption nothing will change. Insanity is defined as doing the same thing over and over and expecting a different result.
Insanity, meet Liberalism
Nobody is gonna move back there and help fund the welfare class. You tax the workers to pay for the dead weight and soon the workers bail and this is what's left.
I'd say just pull out,let the street rats have the ruins. I'ts there bed,let them lie in it.
Copyright © 2014 Microsoft. All rights reserved.
- Commodities are mixed this morning, while the dollar index is flat
- Sept crude oil has been in the red all morning and hit a new LoD near $101/barrel a short while ago. Sept crude oil is currently -0.8% at $101.25/barrel.
- Aug natural gas futures rallied to a new HoD of $3.85/MMbtu. The energy component it holding those gains and is now +1.4% at $3.83/MMbtu
- Precious metals are rather consolidated this morning. Aug gold is currently +0.1% at ... More
More Market News
The idea of US crude being a shelter from turmoil abroad may not be as far fetched as it seems.
MUST-SEE ON MSN
A charcuterie master shares his process for cold-smoking meat at home.
- Jetpacks about to go mainstream
- Weird things covered by home insurance
- Bing: 70 percent of adults report 'digital eye strain'