Debt, Democrats and Detroit- A Losing Combination - Granite Grok

Debt, Democrats and Detroit- A Losing Combination

Since we’re approaching the next push for raising the illusory Debt Limit, and the United States is currently over $17,000,000,000,000 in debt, I thought a post about a shining exemplar of Democrat management and debt might be illuminating.  Detroit, or Detroilet as it has come to be known since the Democrats placed their considerable seats in positions of authoritative execution.

The decadent disease Democrats indoctrinate can be seen by the refuse remaining in its path, it’s similar to that from a truck bumbling its way to the dump while carrying uncovered garbage cans that vomit soiled papers, moldy plastic bottles, and moist sacks of trash along on the side of the road with every bump and rut its tires meet. It’s as if the driver were leaving some sort of trail of rubbish to serve as a post-prosperity version of bread crumbs so that he can find his way back to his fetid origins. Speaking of fetid origins, back to Detroit. Detroit is a good example of Democrat rule and the effects of unadulterated leftism, i.e., Big Unions, Big Government, Big Debt, Big Corruption, Big Lies.

I stumbled on an article by chance earlier today and, being a believer that our nation has indeed taken the exit towards a post-prosperity period and is quickly approaching decaysville one squalid, blighted block at a time, I found it very interesting. Very instructive. I include a part of it below, the rest can be read here.

Let’s play a little game. See if you can detect any similarities or parallels to any other governmental institutions. I’ll provide hints along the way to help those Democrat readers along.

It begins (any emphasis was made by yours truly):

How Detroit Went Broke, The answers may surprise you– and don’t blame Coleman Young.

Detroit is broke, but it didn’t have to be. An in-depth Free Press analysis of the city’s financial history back to the 1950s shows that its elected officials and others charged with managing its finances repeatedly failed — or refused — to make the tough economic and political decisions that might have saved the city from financial ruin.

Instead, amid a huge exodus of residents, plummeting tax revenues and skyrocketing home abandonment, Detroit’s leaders engaged in a billion-dollar borrowing binge, created new taxes and failed to cut expenses when they needed to. Simultaneously, they gifted workers and retirees with generous bonuses. And under pressure from unions and, sometimes, arbitrators, they failed to cut health care benefits — saddling the city with staggering costs that today threaten the safety and quality of life of people who live here.

Does that ring a bell? “borrowing binge”, “failed to cut expenses”, haven’t we seen that somewhere else, say that little putrescent cesspool steaming just off the Potomac?

The numbers, most from records deeply buried in the public library, lay waste to misconceptions about the roots of Detroit’s economic crisis. For critics who want to blame Mayor Coleman Young for starting this mess, think again. The mayor’s sometimes fiery rhetoric may have contributed to metro Detroit’s racial divide, but he was an astute money manager who recognized, early on, the challenges the city faced and began slashing staff and spending to address them.

And Wall Street types who applauded Mayor Kwame Kilpatrick’s financial acumen following his 2005 deal to restructure city pension debt should consider this: The numbers prove that his plan devastated the city’s finances and was a key factor that drove Detroit to file for Chapter 9 bankruptcy in July.

The State of Michigan also bears some blame. Lansing politicians reduced Detroit’s state-shared revenue by 48% from 1998 to 2012, withholding $172 million from the city, according to state records.

Decades of mismanagement added to Detroit’s fiscal woes. The city notoriously bungled multiple federal aid programs and overpaid outrageously to incentivize projects such as the Chrysler Jefferson North plant. Bureaucracy bogged down even the simplest deals and contracts. In a city that needed urgency, major city functions often seemed rudderless.

Bogged down bureaucracy, rudderless administration. This is a major hint. C’mon you can get it. Doesn’t that sound like something that rhymes with abomination?

When all the numbers are crunched, one fact is crystal clear: Yes, a disaster was looming for Detroit. But there were ample opportunities when decisive action by city leaders might have fended off bankruptcy.

If Mayors Jerome Cavanagh and Roman Gribbs had cut the workforce in the 1960s and early 1970s as the population and property values dropped. If Mayor Dennis Archer hadn’t added more than 1,100 employees in the 1990s when the city was flush but still losing population. If Kilpatrick had shown more fiscal discipline and not launched a borrowing spree to cover operating expenses that continued into Mayor Dave Bing’s tenure. Over five decades, there were many ‘if only’ moments.

If “ifs” and “buts” were candy and nuts, the people of Detroit wouldn’t have voted Democrat for 60 years, and thus, would not be living in wretched squalor today.

Detroit Mayors from 1962 to present:

Jerome Cavanagh January 2, 1962 – January 5, 1970 Democrat
Roman Gribbs January 6, 1970 – January 1, 1974 Democrat
Coleman Young January 1, 1974 – January 3, 1994 Democrat
Dennis Archer January 3, 1994 – December 31, 2001 Democrat
Kwame Kilpatrick January 1, 2002 – September 18, 2008 Democrat
Kenneth Cockrel, Jr. September 18, 2008 – May 11, 2009 Democrat
Dave Bing May 11, 2009 – December 31, 2013 Democrat
Mike Duggan January 1, 2014 – present Democrat

Next time you hear a Democrat talk about their ideas for managing municipalities, states, or federal offices, keep this in mind. They’re really, really not good at it.

Detroit got into a trap of doing a lot of borrowing for cash flow purposes and then trying to figure out how to push costs (out) as much as possible,” said Bettie Buss, a former city budget staffer who spent years analyzing city finances for the nonpartisan Citizens Research Council of Michigan. “That was the whole culture — how do we get what we want and not pay for it until tomorrow and tomorrow and tomorrow?”

Ultimately, Detroit ended up with $18 billion to $20 billion in debt and unfunded pension and health care liabilities. Gov. Rick Snyder appointed bankruptcy attorney Kevyn Orr as the city’s emergency manager, and Orr filed for Chapter 9 on July 18.

$18,000,000,000 to $20,000,000,000 in debt and liabilities. Numbers only Democrats can achieve. Of course many saw it coming, Democrats included. Naturally, Democrats offered their solutions (we know how that worked out).

  •  Taxing higher and higher: City leaders tried repeatedly to reverse sliding revenue through new taxes. Despite a new income tax in 1962, a new utility tax in 1971 and a new casino revenue tax in 1999 — not to mention several tax increases along the way — revenue in today’s dollars fell 40% from 1962 to 2012. Higher taxes helped drive residents to the suburbs and drove away business. Today, Detroit still doesn’t take in as much tax revenue as it did just from property taxes in 1963.

Is anyone surprised by this? Well, anyone besides a Democrat. They keep pushing the same scheissekopf plan over and over again. More. More. More. As if it worked. And this coming from a party that lays claim to science and wanting to “do what works”. Bullsh*t. Even faced with undisputed empirical evidence, they bury their head in their leftist Marxist ideology and repeat what hasn’t worked before. More. More of your money for their buddies and their pockets.

A bit of unsolicited advice, when a Democrat starts discussing management, economics and their solutions. Clench your wallet and walk away. No run!

  • Skyrocketing employee benefits: City leaders allowed legacy costs — the tab for retiree pensions and health care — to spiral out of control even as the State of Michigan and private industry were pushing workers into less costly plans. That placed major stress on the budget and diverted money from services such as streetlights and public safety. Detroit’s spending on retiree health care soared 46% from 2000 to 2012, even as its general fund revenue fell 20%.
  • Gifting a billion in bonuses: Pension officials handed out about $1 billion in bonuses from the city’s two pension funds to retirees and active city workers from 1985 to 2008. That money — mostly in the form of so-called 13th checks — could have shored up the funds and possibly prevented the city from filing for bankruptcy. If that money had been saved, it would have been worth more than $1.9 billion today to the city and pension funds, by one expert’s estimate.

See! Your money for Democrat cronies who contribute your money to Democrat campaigns to elect more Democrats to take your money for Democrat cronies who contribute… just re-read this sentence for 60 years to see how Democrat “solutions” work.

  • Borrowing more and more: Detroit went on a binge starting around 2000 to close budget holes and to build infrastructure, more than doubling debt to $8 billion by 2012. Under Archer, Detroit sold water and sewer bonds. Kilpatrick, who took office in 2002, used borrowing as his stock answer to budget issues, and Bing borrowed more than $250 million.
  • Adding the last straw — Kilpatrick’s gamble: He’s best known around the globe for a sex and perjury scandal that sent him to jail and massive corruption that threatens to send him to prison next month for more than 20 years. The corruption cases further eroded Detroit’s image and distracted the city from its fiscal storm. But perhaps the greatest damage Kilpatrick did to the city’s long-term stability was with Wall Street’s help when he borrowed $1.44 billion in a flashy high-finance deal to restructure pension fund debt. That deal, which could cost $2.8 billion over the next 22 years, now represents nearly one-fifth of the city’s debt.

Of course there would be a sex and corruption scandal. It’s a Democrat toilet, it’s a natural fit. It kind of goes without saying.

With all the lost opportunities over decades, with Detroit’s debt mounting, with the housing crash and Great Recession just over the horizon, 2005 turned out to be the watershed year.

Although no one could see it at the time, Detroit’s insolvency was guaranteed.

No, people could see it at the time. Just not Democrats.

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