Based on the economics our country loves to practice, we should:

 

take taxes from all the other states.

give it to the city of Detroit

create jobs by letting them hire workers to bulldoze the 76,000 buildings not being used

use the rest of that money to create even more jobs to construct buildings

 

this way not only will jobs be created but the city of Detroit can then collect money by taxing those who worked on bulldozing and constructing.

 

Its simple economics.

The problem is you consistently show a lack of knowledge of economics and use trivial liberal utopia arguments that aren't based in reality.

 

I'll ask again do you know the difference between a secured and unsecured debt ? Also you understand there is precedence in this country for municipalities filing bankruptcy and for public pensions being slashed. This happens to be the largest but not close to the first. The citizens of Detroit had every opportunity for 50 years to elect the right people. You learn nothing and fix nothing by not allowing a bankruptcy.

 

Honestly I'm amazed grown adults actually think the way you do when it comes to economy. Ignore math and law , hilarious.

The cost of a new I-75 bridge over the Ohio River would be $2.5 billion, which is .0025 percent of the money the United States of America spent to "gain the peace" in Iraq. That's two zeros before we come to real numbers. So let's try again: Would this country be better served by investing $1 trillion in new roads, bridges ... resuscitating cities ... or in ousting an Al Capone wannabe in the Middle East?

The cost of a new I-75 bridge over the Ohio River would be $2.5 billion, which is .0025 percent of the money the United States of America spent to "gain the peace" in Iraq. That's two zeros before we come to real numbers. So let's try again: Would this country be better served by investing $1 trillion in new roads, bridges ... resuscitating cities ... or in ousting an Al Capone wannabe in the Middle East?

You are talking about a different topic . My point is bad decisions have consequences . Detroit has no one to blame but themselves.

 

Infrastructure is a different topic. But I do believe this is one of the few major jobs federal government is actually responsible for. The problem is the Federal government has become so large it can't afford it's basic responsibilities .

If you've lost 60% of your population over the past 60 years, who's left to pay the tax?

 

The bigger question might be WHY you lost 60% of your population??

I hear what you're saying. In my own household, I'm a fiscal conservative, which is why I personally have zero debt. I owe nobody nothing. Zilch. I've saved money over the years and made some smart investment decisions. Deficit spending on a government level, however, is a fact of life. What really, really, really upsets me is how this country spends hundreds of billions of dollars on land wars in Asia while bridges, roads, even entire cities crumble, and the collective response often is a big yawn.

 

Congratulations on your somewhat unique financial achievement in today's world--Dave Ramsey would be proud!!

 

I understand you're obviously antiwar, and I can understand your points. Please help me understand why a fiscally responsible person (in your personal life) wants to reward those who have made a mockery of a fine community, and the uninformed masses who have allowed them to operate for so many years; by rewarding them for their fraud & ignorance??

 

Further, what kind of precedent does this set for the next round of hopelessly in debt governmental entities that are sure to follow in Detroit's footsteps?? Rewarding this irresponsibility will only create further irresponsibility.

 

If you want to bail out similarly irresponsible folks, I'm sure there are thousands close by that would welcome your assistance??

I think everyone should understand the implications of the high profile municipal bankruptcy. It is a bellwether. It has implications to every municipal and state government across the nation. It is not unique. It is not the first. It is - at this time - merely the largest bankruptcy at a state and local level. More will come across the nation. What does seem to make this worse than most is the basic root - people and tax base left the city driving this major municipality into bankruptcy faster than most. But no city, county or state is immune to this type of event, as much as we want to believe that.

 

I believe a fundamental political driver here is the lack of understanding by political leaders of a) basic financial accounting and b) free-market (Adam Smith) dynamics. Both concepts are well understood in the private sector. But the government sector is in no way immune to these fundamental concepts - as much as politicians (mainly liberal-oriented politicians) want to ignore them.

 

Basic Financial Accounting and Cash Flow

 

A mature business and all governments in general MUST generate enough cash flow (revenue) to meet 'expenses'. Expenses are what you need operate the entity on a day-to-day, week-to-week, month-to-month basis. It is a FUNDAMENTAL concept that basically says:

 

'If you are not generating enough cash flow (revenue) to meet your EXPENSES - you do not have a viable business model and will not remain in business.'

 

This concept is an absolute fundamental in a private-sector mature business and it applies to government as well. A government's cash flow - usually in the form of taxes and fees - MUST cover its expenses. If it does not it should raise red flags and cause SEVERE alarm at all levels. Borrowing to meet true, accounting expense line items is problematic. I am sure some of the financial whizzes on the board here will back that up. Detroit did that. And kept doing it. Bonds are how government usually 'borrow' money. Bonds for true 'investments' that will generate new tax or fee revenue or enhance existing streams of such are good. Bonds that are sold to merely meet expenses are not good - period. The later is being done by many governments today - including the Federal government. Its a giant red flag - or should be. It is not sustainable.

 

Free Market Adam Smith Dynamics

 

Again, a concept usually associated solely with the private sector but it can impact governments, especially local municipalities a great deal. How consumers react to product pricing is one of Adam Smith's fundamentals. As pricing for a product rises more competitors will enter the market. They will compete on many factors - a main one being price - and thus they will keep each other in check. As prices fall or stagnate competitors will leave the market and prices will rise and the cycle will continue. If the entire industry makes prices too high through (illegal) collusion or just due to cost of production then CONSUMERS will leave the market and thus force prices to fall. It is the later element that happened in Detroit apparently. Consumers, i.e. taxpayers, left the market. This then greatly impacted the tax revenues from property and likely payroll taxes. I read where to combat the lost revenue Detroit raised tax rates. But this did not work to stave off the current situation. Why? Like consumers in a free-market system taxpayers 'left the market'. Those that could simply left. And those that could were the higher end revenue generators. In this case Atlas did not just shrug. Atlas packed his bags and simply left. Just as predicted by Rand. I would assume most just move outside the city limits - Southfield, Dearborn, Plymouth and other municipalities in the region seem to be fairing OK. Detroit's loss was their gain.

 

Unlike what some expose in this thread, it is impossible for any entity - business or government - to continually spend more than it takes in. 'Deficient spending' is done and done all the time via bond sales by governments. In some case I guess governments can legally just borrow unsecured monies - almost like an unsecured credit card. But most must sell bonds to fund 'debt'. But when this sort of spending and debt generation is used to cover basic expenses - a train wreck is coming. Many seem to fail to understand this. When political leaders ignore these basic fundamentals bad things happen and a lot of people get hurt when pensions are not paid and services are cut and basic fire and police protection a curtailed or eliminated.

There are ways to boost local revenues without further burdening the remaining residents -- the "urban faithful." Having said that, any long-term solution may well require regional or state or even national participation. (If we have banks too big to fail, then I would argue that we also have cities too big to fail.) A healthy Detroit = a healthy region = a healthy Michigan. No room for suburban narrow-mindedness here.

 

How far do you take your pyramid scheme? How long? What type of spending is going to help with people and businesses moving out? Are you recommending to make Detroit a complete welfare city? You don't want to put additional burdens on the people who helped cause the situation but you do want to place a burden on people who may have lived their entire lives scrimping and correcting their own problems? What happens if the cities where these people live go bankrupt because they couldn't sustain paying their own taxes plus Detroits? The national bank situation affected the national economy way more but even that had an end plan. Don't see a Detroit having an ending if regional or national taxes were shipped in there.

Congratulations on your somewhat unique financial achievement in today's world--Dave Ramsey would be proud!!

 

I understand you're obviously antiwar, and I can understand your points. Please help me understand why a fiscally responsible person (in your personal life) wants to reward those who have made a mockery of a fine community, and the uninformed masses who have allowed them to operate for so many years; by rewarding them for their fraud & ignorance??

 

Further, what kind of precedent does this set for the next round of hopelessly in debt governmental entities that are sure to follow in Detroit's footsteps?? Rewarding this irresponsibility will only create further irresponsibility.

 

If you want to bail out similarly irresponsible folks, I'm sure there are thousands close by that would welcome your assistance??

I'm not so sure this is a matter of irresponsible folks vs. responsible folks. I think if Mitt Romney himself had been mayor of Detroit for the past 25 years, we'd be about where we are today. Lots of big cities deal every day with unions and underfunded pension plans, and not all big cities end up like Detroit.

 

Detroit, probably more than any major U.S. city, was established on an unsustainable economic model. (In a previous post, I likened Detroit to a gold rush city; I think it's a good analogy.) When Detroit's Big Three automakers sold lots of cars, Detroit did well. When the economic model shifted and the plants left the city for the suburbs and other states, Detroit started going downhill. The city still had to provide police and fire protection to residents, but the plant that moved one mile outside the city limit no longer was part of the tax base.

 

Actually, the real story here might be Detroit lasting as long as it did.

 

In any event, here's a pretty good analysis on what went wrong in Detroit. (Link on next line.)

 

Detroit's bankruptcy follows decades of decay

 

And for the record, I'm not anti-war. I'm anti-Iraq War.

Similar is happening in the Commonwealth of Kentucky. If I were a public school teacher 10 years away from reaching the magic number of 27-30 years in the classroom, I'd be a little worried as to what's going to happen.

 

 

I don't disagree. Kentucky has done an abysmal job funding their pension plans but every time there is serious discussion about changing new workers to a 401K plan rather then the underfunded chaos that we have now the unions and Dems stop it.

New $444 million hockey arena is still a go in Detroit - Jul. 26, 2013

 

Steering into the skid I guess?

New $444 million hockey arena is still a go in Detroit - Jul. 26, 2013

 

Steering into the skid I guess?

 

Zero cities should be paying for sports arenas. Detroit is the absolute LAST city that should be.

 

This is ridiculous.

I won't say zero cities should be but definitely not one that is/has filed bankruptcy.

I won't say zero cities should be but definitely not one that is/has filed bankruptcy.

 

They are nearly always a drain on the local government/taxpayers and studies have shown that the economic development touted by their proponents almost never pans out. But that's a subject for a different thread.

 

We agree: this is a bad move for Detroit.

Zero cities should be paying for sports arenas. Detroit is the absolute LAST city that should be.

 

This is ridiculous.

 

I'm pretty sure the bond is being issued by the state. Also its my understanding a private firm is paying a large portion if not a majority of the bill.

I'm pretty sure the bond is being issued by the state. Also its my understanding a private firm is paying a large portion if not a majority of the bill.

 

This is from yesterday: New Stadium Likely Unaffected by Bankruptcy

 

It appears the arena is part of a $650 million entertainment district project. The bond issue specifically for the arena is $450 million. Of that bond issue, $238 million is public and you're right, it is from the state, not the city. The funds are derived from property taxes on downtown real estate. Apparently it's from a section of dedicated state funds designated as property tax revenue to be used specifically for re-development.

 

I'd like to see the full deal. There's been no evidence that the supposed economic redevelopment that comes from a new arena/stadium ever materializes.