Detroit bankruptcy caused by decades of liberal policies

Detroit is a showcase for the liberal agenda — and now it is bankrupt. More than 50 years of control by big-government liberals and union bosses have left a once-great American city crippled.


Democrats have dominated the city council, and there’s been a Democratic mayor since 1962. One-party government quickly became bad government, featuring liberal policies such as sweet benefits for government unions.

For decades, Detroit kept kicking the can down the road: unaffordable borrowing, state grant schemes, raising taxes to the maximum allowed by the state, and deferring public pension contributions rather than cutting spending – just like Chicago and the State of Illinois.

City Hall made promises to public employees they couldn’t keep, so pension obligations is half of its $18B – $20B debt because the city experts predicted higher market returns, downplaying the actual financial risk.

Forty percent of the street lights are broken, only a third of its ambulances are in service, and there are 78,000 abandoned buildings. Crime and high tax rates have driven middle-class families to the suburbs.

Almost 50% of the properties are delinquent in paying their taxes, only 8.7% of the violent crimes are solved and Detroit has the highest crime rate in the U.S. for large cities, while manufacturing jobs in the city have fallen from 200,000 to just 20,000 today.

The unemployment rate in Detroit has tripled since 2000 to 16%, more than twice the national average. The city’s public schools have failed, with just 7% of eighth graders proficient in reading.

It takes police about an hour to respond to calls, and the city’s population has dropped by 25% in just the last 10 years, as hundreds of thousands of residents and business fled the city.

Now, the bill is coming due and is a great example of what liberal policies will do to any government entity if left unchecked!

An example closer to home: Chicago recently saw its credit rating triple-notch downgraded, just a few positions above junk bond status because of a $19-billion unfunded pension liability, which the ratings service Moody’s puts closer to $36 billion.

It’s no surprise, given the pressure public pensions are putting on municipal budgets, that any move to ease those liabilities, especially through a bankruptcy court order like what’s happening in Detroit, could set a path nationwide for state and municipal officials, to find a way out of the problems liberal policy decisions have caused.

Detroit will be the first to fight the fight in courts, a fight that eventually will take place in cities across the nation that have overspent their revenue to prove that state constitutions do not override federal laws.

A Democratic judge in Michigan has already ruled the filed bankruptcy violates the state constitution and the ruling is being appealed by the State Attorney General.

The Democratic judge has ordered that a copy of her ruling be sent to President. Obama, saying he “bailed out Detroit” and may want to look into the pension issue. Liberals always looking for a new source of revenue to spend!


Meanwhile, unions aim to protect their pensions from any impairment—a necessity if the bankruptcy is to be successful—by arguing that their promised benefits are protected by the state constitution, never mind that the federal bankruptcy code trumps state law. It also authorizes the abrogation of contracts.

As the lawyers battle in court, the streets of Detroit will continue to suffer from deteriorating services, blight and crime. This is the real tragedy of Motown’s fiscal collapse.

Just remember Detroit the next time you hear a liberal tell you government debt doesn’t matter, except of course, as an excuse for raising taxes.