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Detroit is bankrupt. $US20 billion in debt. Reduction of manufacturing input to GDP.; Bankrupt Detroit Receives Less U.S. Aid Than Colombia
Topic Started: 19 Jul 2013, 01:02 PM (6,850 Views)
miw
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Interesting take on Detroit Bankruptcy.

Full article at: A Quick Thought On Municipal Bankruptcy

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On CNBC today, analyst Meredith Whitney commented that “everybody loses” from the Detroit declaration of bankruptcy.

If that is the case, then why in the world are they seeking bankruptcy? If everybody loses, then it means nobody wins from declaring bankruptcy, and if that’s the case, then it would be truly idiotic to seek it.

But of course, this is nonsense. There is no wealth being either created or destroyed in a bankruptcy proceeding; it is merely being forcibly reallocated. In this case, the winners are the taxpayers of Detroit. More to the point, it is the future taxpayers of Detroit, who were on the hook for a bunch of liabilities that they were going to have to figure out how to pay someday, but are not now going to have to pay. Those folks win big. And it’s a good thing, too, because Detroit needs more of these future taxpayers to move to Detroit.
The truth will set you free. But first, it will piss you off.
--Gloria Steinem
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mel
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one of the comments on the article really grabbed me
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running Detroit is not the same as running IBM. first and foremost you need to bring people INTO the municipality not scare them away. to do that law and order needs to be revived. simply put the crime wave that is Detroit has to end and it has to end now. second the massive brownfields that are the City have to be removed. in effect the bulk of the City needs be leveled. third some type of rational tax structure needs to be created. future creditors need to be assured that something like this will never happen again. i'm not sure how this will play out but it sure looks like more of an end than a new beginning right now.
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peter fraser
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mel
26 Jul 2013, 01:18 AM
one of the comments on the article really grabbed me
Bankruptcy was probably a good idea. Municipalities (councils) in Australia borrow against their income potential. It's hardly likely that Detroit put up hard assets and if they did they are no longer worth anything.

Detroit could come back if they can halt the crime and gentrify the city whilst attracting new business to the area because of low cost of property and set up costs for blue sky industries.

But in the USA there is already a lot of competition for that business from cities who are a lot further along in the redevelopment curve.

Maybe Rudi Giuliani could turn it around.
Any expressed market opinion is my own and is not to be taken as financial advice
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mel
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GloomBoomDoom
23 Jul 2013, 06:05 PM
Detroit Destroyed by Democracy - Peter Schiff
http://www.youtube.com/watch?v=ZHMhG9Trh0s
Great Video Marc. Schiff pretty much echoes Gen X's earlier post...
78,000 abandoned homes with some of the highest property taxes and crime in the country doesn't sound healthy at all.
On top of everything else the level of manufacturing going to China pretty much secures Detroits position as a basket case unless something very significant changes imo.
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miw
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mel
26 Jul 2013, 02:13 PM
On top of everything else the level of manufacturing going to China pretty much secures Detroits position as a basket case unless something very significant changes imo.
Detroit's auto jobs mostly did not go offshore. They just went to more efficient manufacturing elsewhere in the US where they didn't have the UAW.
The truth will set you free. But first, it will piss you off.
--Gloria Steinem
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From living in the US and following this story fairly closely as a hobby.

Detroit is the quintessential example of top down central planning, extreme corruption, and an out of control central govt.

They literally taxed the city to death, people were paying 3000 a year in taxes for a 35000 property.
Detroit was even featured as one of president Lyndon Johnsons model city program, a democratic failure.

Imagine a city where all the major economic planks of the statist or "progressive" platform have been enacted:

A "living wage" ordinance, far above the federal minimum wage, for all public employees and private contractors.
A school system that spends significantly more per pupil than the national average.
A powerful school employee union that militantly defends the exceptional pay, benefits and job security it has won for its members.
Other government employee unions that do the same for their members.
A tax system that aggressively redistributes income from businesses and the wealthy to the poor and to government bureaucracies.

Would this be a shining city on a hill, exciting the admiration of all? We don't have to guess, because there is such a city Detroit

Detroit has been dubbed "the most liberal city in America" and each of these "progressive" policies is alive and well there. How have they worked out?

In 1950, Detroit was the wealthiest city in America on a per capita income basis. Today, the Census Bureau reports that it is the nation's 2nd poorest major city, just "edging out" Cleveland.

Just my opinion but this is a shining example of governments failure and excess.
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doubleview
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KTMChris
27 Jul 2013, 01:55 PM
Detroit is the quintessential example of top down central planning, extreme corruption, and an out of control central govt.

A "living wage" ordinance, far above the federal minimum wage, for all public employees and private contractors.

Just my opinion but this is a shining example of governments failure and excess.
I agree It is the inevitable path to communism and totalitarianism.

Government NEVER does anything efficiently or particularly well.

There are some things that only government can do, but it does even those things half-assed and for way too much money.

Additionally Socialism cannot exist without slavery.

Slavery, by definition, is confiscating the produce of others to benefit yourself and not providing compensation.

If you have a "right" to what others produce then they are slaves, by definition.
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miw
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doubleview
27 Jul 2013, 04:22 PM
I agree It is the inevitable path to communism and totalitarianism.

Government NEVER does anything efficiently or particularly well.

There are some things that only government can do, but it does even those things half-assed and for way too much money.

Additionally Socialism cannot exist without slavery.

Slavery, by definition, is confiscating the produce of others to benefit yourself and not providing compensation.

If you have a "right" to what others produce then they are slaves, by definition.
I am sure that at some time, in some place, a government has done something efficiently and well.

But otherwise, modulo a little toning down of the emotive language, I agree with everything in this post.

Every "right" one person has is paired with someone else's obligation.
The truth will set you free. But first, it will piss you off.
--Gloria Steinem
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peter fraser
26 Jul 2013, 08:48 AM
Bankruptcy was probably a good idea. Municipalities (councils) in Australia borrow against their income potential. It's hardly likely that Detroit put up hard assets and if they did they are no longer worth anything.
O. So are you suggesting all our Australian cities should declare bankrupt as well? We can vote in a new council for each and start borrowing money afresh.
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miw
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27 Jul 2013, 04:51 PM
O. So are you suggesting all our Australian cities should declare bankrupt as well? We can vote in a new council for each and start borrowing money afresh.
Given that local government in Australia is just a branch of state government, it would have to be the states that declared bankruptcy. I'm not even sure that is possible.
The truth will set you free. But first, it will piss you off.
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