Detroit is economically broken

Detroit Free Press (Detroit’s very liberal newspaper) Rochelle Riley, published another rambling column covering Detroit’s economic collapse. In her column, Mrs. Riley takes Michigan’s Governor, Rick Snyder, to task over his requirement to create a Financial Advisory Board to oversee Detroit’s finances in exchange for a Michigan tax payer funded $100 million bail-out.

Condensing her column to its core, Mrs. Riley believes the city’s problem stems from a lack of co-operation between Michigan’s capitol and Detroit. As she explains it: “the feud between Lansing and Detroit? Enough. … The way the consent agreement was handled was more like a deal the old Detroit leadership might have done rather than something a new positive governor would do.”

Mrs. Riley idea of co-operation?  Michigan tax payers “share” the state of Michigan’s newfound budget surplus.

Gov. Snyder, balancing the state budget faster than any governor in recent history and piling up an $800-million surplus, could have shared some of the money with cash-strapped cities across the state, such as Detroit, lessening the need for emergency managers.

Unfortunately, Detroit’s problems go much deeper than Michigan tax payers ‘sharing’ the state’s budget surplus. Sending money will only prolong the inevitable collapse of Detroit.

There is one cold hard fact that no one is talking about. Detroit is economically broken.

Period.

When a city depends on governmental agencies as three of its top five employers, there is a serious problem. When you drill further into Detroit’s employment data, you find that 47.8% of employees at the city’s top 25 employers work for a tax payer supported (governmental) agency. In other words, a very large (and expensive) percentage of Detroit’s work force does not add anything to the economic growth of the city whatsoever.

This is, using lefty language, is unsustainable.

There are no good solutions left for Detroit. Either a state appointed Financial Advisory Board or bankruptcy. A bail out of the city is not going to force actions that need to happen to hopefully turn Detroit around.

This is not only a Detroit problem either. And it is not only a city problem (California for example). This is a Liberal / progressive government problem.

Detroit’s failure is now systemic. They have an unbroken string of Liberal Democrat governments for 50 years, proving (again) that the progressive economic model of putting government front and center in peoples lives is a recipe for failure.

And, until the bloated liberal democrat government and its oversize payroll are cut down to size, and no bailout no matter how large, will solve the problems facing Detroit.

Two more and important points should be mentioned regarding the State of Michigan running a $800 million budget surplus:

  • When politicians are involved, budget surpluses have a uncanny ability to turn to budget deficits in a hurry.
  • If the State of Michigan us running a $800 million surplus, Michigan taxpayers are being overtaxed by at least $800 million.

Counting on a state budget surplus to finance an economically broken city is not a long term plan for success, Mrs. Riley.