Detroit’s Collapse Under Thirty Years of Liberal Mismanagement


Our Democrat cities look like third world countries. Chicago saw its worst month in August with 400 shootings, almost 3,000 for the year so far. The left blames the guns instead of the core problem of gangs and drugs. Detroit has been destroyed in much the same way as well as by gross mismanagement.

Detroit's Grand Ballroom

Bill Clinton’s solution for Detroit is not to rebuild the city with the people who live there, giving them jobs, it’s to rebuild it with unvetted Syrians flooding the country. Since he will be in charge of the economy under President Hillary, we can expect more of this.

The left-wing Hillary-Soros-Black Lives Matter solution is to lie about what is going on.

What really destroyed Detroit has been explained by

  1. The population has collapsed. It has gone from 1.8 million residents to 688,000 and it continues to go down. The city government did not shrink with the population – a huge problem given the revenue wasn’t there to support it.
  2. Detroit has the highest unemployment of any major city in the USA. They are no longer a major manufacturing center.The high cost of the city government drives companies away.
  3. Detroit has $18.5 billion in general obligation (GO) debt.
  4. Much of the debt is the result of public pensions. They have more than $3 billion in unfunded pension liabilities. The very thing that is causing their problems is the reason the judge halted the bankruptcy.
  5. The city is buried in pension costs because it has too many public workers. While the population caved, the public sector kept growing. They have more public employees than any comparable-sized city.
  6. Those running the pension funds aren’t helping. How about the four city  leaders charged with running the city’s broke pension fund taking an all expenses paid conference trip to Hawaii in April 2013 while fire and police took pay cuts. They have had many corrupt leaders.
  7. Then there are the other corrupt leaders. “Former mayor Kwame Kilpatrick, a Democrat, was convicted in March 2013 on 24 federal felony offenses, including mail fraud, wire fraud, tax evasion, racketeering and extortion. Prosecutors said he doled out jobs to friends and family, wasted city tax dollars on fraudulent contracts and pocketed more than $1 million in illegal kickbacks.”
  8. Basic city services no longer exist. Only one-third of the city’s ambulances are in service. About 40% of the city’s street lights do not function. Citizens have stepped up to care for parks, run the bus company, and handle security.
  9. Police cannot respond to the growing crime wave. Police, teacher and firefighter retiree pensions must be paid which leaves little for active-duty personnel. It takes about 58 minutes for emergency personnel to answer emergency calls. Only 8.7% of the city’s crimes are solved though statewide it is 30.5%

That is reminiscent of GM’s failure. They had more employees on retirement and couldn’t afford the high salaries of current employees.

  1. There are 78,000 abandoned buildings in Detroit because of all of the above.

The unions like to blame Wall St. but the fact is that the mismanagement of their funds and pensions are largely to blame. Democrat politicians curry favor with unions for votes and monetary support.

Detroit’s municipal pension fund trustees made payments to retirees, active workers, and other workers well beyond reasonable limits and they did it for decades, costing the dying city billions of dollars. Some of the payments were called the ’13th payment’, according to an outside actuary.

The payments included ‘bonuses’ to retirees, supplements to active workers, cash to families of deceased workers who didn’t have enough time on the job to secure a pension, and so on. The payments were not disclosed on annual reports, suggesting deception.

The total excess payments ran to more than $100 million by 2013. Sometimes the pension fund trustees poured more than twice as much as required into the retirement funds and they would not have had to do that if they only made the specified payments.

So much money had been drained from the system by 2005, double payments weren’t enough partly because of dwindling revenues.

They turned to the bond market in 2005 in desperation but did not reveal the excess payments when they sold the bonds.

The city borrowed more than $1.44 billion in a failed attempt to save Detroit but didn’t bother to tell the banks that they made these extra ‘bonus’ payments.

This corruption and cronyism eroded the financial health of the pension system.

The city council had to approve the payments made by the trustees but they were under the impression the money was there. One former councilman said it would have been impossible to try and buck the trustees.

Other cities will follow. We are rotting from within and the Democrats won’t talk about it. They will blame guns, Wall Street, Republicans.

Harrisburg, PA and Stockton, CA are examples of smaller cities that went bankrupt for much the same reasons as Detroit. There will be more cities and eventually states that will follow suit. We are rotting from the inside out.

In 1999, New York owed $45 billion and by 2009, they owed $69 billion. They now owe $63 billion with only $3 billion approved by voters.

Illinois is on the same path.The pension systems are severely underfunded. They are approving contracts they can’t pay for.

According to the U.S. Census Bureau, California has by far the highest poverty rate in the nation of any state when adjusted for housing costs. With a rate 50 percent above that of Mississippi, for low-income households, California is regulating itself into something of a third-world country, with large portions of the population stuck in permanent poverty.

Taking guns away or demanding teachers not speak the truth won’t help these liberal cities and states.




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