Detroit Bankrupt

Detroit just became the largest municipal government ever to declare bankruptcy in the United States.  It wasn't a surprise - except to the unions who were trying to file last-minute court cases to shut the bankruptcy filing down.  Everyone knew there were big problems with the city's finances, to put it mildly.  When the corrupt Democrats who ran Detroit into the ground over the past fifty years were finally swept aside, the emergency managers installed by Governor Rick Snyder asked creditors to take a 90 percent loss on their claims.  They weren't terribly interested in such a deal.

The media is frantically trying to spin away the effect Democrat Party dogma and one-party corruption had upon Detroit.  You'll hear plenty of news reports about collapsing population - the city lost 25 percent of its residents over the past decade.  But those people weren't abducted by alien flying saucers.  You'll hear a lot about the auto industry's problems, but those problems were not primarily due to declining sales.

No, this great city died because its ruling class of politicians and union bosses spent it into oblivion.  Absurdly unsustainable pension plans created a towering mountain of unsustainable liability.  The city treasury was looted for the benefit of officials and their very special friends, leaving municipal services at a Third World level.  Taxes were raised, driving employers away.  The auto industry collapsed under the weight of Big Labor's demands.  Those who raised objections were told they were foolish to worry about the city's debt, because it would always be easy to borrow more money and crank up the tax rates to cover those staggering bills.

Everyone in Detroit's power structure spent money like tomorrow would never come.  Well, tomorrow is here, and the city is bankrupt.  The same philosophy will destroy state governments, and then the federal government, in short order.  Remember Detroit the next time you hear a left-wing hustler tell you government debt doesn't matter, except as an excuse for raising taxes.

Source: Daily Events Letter,  by John Hayward, Senior Writer July 19 2013 Human Events | One Massachusetts Avenue, NW | Washington, DC 20001 , HumanEventsDaily@email.humanevents.com