Detroit’s Downfall a Warning for America

Imagine a place where there are hour-long waits for 911 calls, and two-thirds of all ambulances are inoperable. Half of all street lamps left dark. Eighty thousand houses left vacant for vandals, infestation, and drug addicts. Every other person is a tax cheat, and jobs are scarce—the unemployment rate is more than double the national average. Half of the population is illiterate.

No, you’re not in Zimbabwe or North Korea or District 9. You’re in the Utopian paradise known as Detroit.

This isn’t how it was 50 years ago. In fact Detroit was the crowning jewel of the United States, a booming city with the highest GDP in America. Over two million residents enjoyed a city full of life and promise and prosperity.

Now, people and businesses are leaving. Only 700,000 people remain, with many more leaving every day. The city of Detroit has filed for bankruptcy, 11 billion dollars in debt and no way of paying it back.

Having been controlled by Democrats for the past half-century, Detroit was recently ranked the most liberal city in the nation. It has the fourth-largest tax burden in the country, and an astronomical ratio of population to government workers—55 residents to every 1 government employee. The city employs 13,000 government workers.

Compare that to Fort Worth which has a slightly higher population, yet only 1 government employee per 118 residents. San Jose has nearly a million residents but just 6,000 government workers.

detroit1Despite a mass exodus of business and jobs from Detroit, compounded with the widespread tax evasion, the city has been unwilling to cut its government. Pensions is where Detroit’s bankruptcy problem lies, given that $9 billion of its $11 billion in liabilities is as a result of pensions to former government employees.

But Detroit is hardly the only US city that is in trouble financially. A recent CNBC study found that about 120 cities are facing insurmountable debts as government employees continue to retire.

In 2010 the Pew Center estimated that state public pension plans were underfunded by some $1.4 trillion. Chicago just had its credit rating downgraded due to an estimated $36 billion in pension liabilities. Los Angeles is short $30 billion. Baltimore is also running dangerous deficits.

Most of these cities are largely run by Democrat leadership that seek to expand government spending and increase tax burdens at every turn.

detroit-abandoned-house-2What happens when more cities begin to fall over the coming decades? Whole states? Democrat-controlled Illinois is already facing a $95 billion shortfall. Marylanders are fleeing by the thousands as its governor signs tax increase after tax increase, including the recent gas tax hike and the infamous rain tax.

Perhaps Detroit is a wake-up call for America. Statist policies that seek to expand government control, by their very nature, inhibit liberty and opportunity, therefore stifling economic growth and perpetuating an unsustainable cycle that can only end in collapse.

Detroit’s problem is supplying benefits to former government employees. Likewise, America’s problem—and it is a problem—is the welfare state.

Over 100 million Americans are receiving welfare benefits, including 47 million who collect food stamps. Social Security and Medicare are facing annual deficits. Within the next 23 yearsneither program will be able to pay the full benefits that retirees were promised.

Similarly, Detroit will almost certainly be forced to cut pension benefits, despite the complaints of labor leadership. But this is not the private citizen’s fault. It is the culture of government dependence perpetuated by the Statists and an ever-expanding federal government in pursuit of a Utopian society.

130722Detroit_before_after_hBut we ought to know that there is no Utopia in an imperfect world. The more that government seeks to control the individual, the less productive a society becomes. As government becomes more involved in our daily lives—from our health care to student loans to mortgages, to regulations and taxes on virtually everything—the more we lose our freedom.

Like Chicago, America’s credit rating was recently downgraded. The government spends about $1 trillion more every year than it collects in taxes.

Soon, the cost of financing the American debt will be more than $1 trillion a year. In other words the American people will be paying $1 trillion to the government each year, just because our government is unwilling to utilize our money wisely.

The national debt may be $17 trillion—about $148,000 per taxpayer—but the United States faces more than $200 trillion in liabilities. There isn’t enough cash in the world to repay our liabilities.

$200 trillion is the fall of the Roman Empire. $200 trillion is the Weimar Republic. $200 trillion is collapse, a la Detroit.

And Detroit is the product of Statism, when government is out of control with no regard for history or the rules of economics.

The downfall of Detroit represents a dire warning for Americans. But if we don’t rise up and take back our country, if we are content to ignore the signs and surrender our generation to this nightmare, then the Great Depression will seem like a fond memory.

The warning signs are there, and time is running out.


Follow Garrett Humbertson on Twitter @G_Humbertson.


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