GOOD JOB LIBERALS
Detroit’s bankruptcy petition last week was far from a surprise, but what should be noted is that it is the first of what will likely be a major wave of municipalities and states that will follow behind. Specifically, President Obama’s home state of Illinois.
Many wonder why Detroit waited so long to declare bankruptcy. It has been years in the making. Detroit’s $18 billion of debt is just the latest in a downward spiral of bad news coming from a deeply troubled city. Fully half of its debt stems from unaffordable pensions, health care and retirement benefits. By now everyone has read about the awful condition of the city: unemployment double the nation and the highest violent crime rate of any large U.S. city, not to mention 4 out of every 10 street lights out of commission. Detroit literally can’t afford to keep the lights on or pay its bills.
Plagued by a history of bad decisions, Detroit’s city leaders perpetuated some of the mistakes the automakers made instead of learning from them. Government growth was fueled not by new tax revenues, but by future promises to its copious amount of municipal workers. At the same time, the city pursued an anti-growth agenda through tax increases, expanded regulation and abysmal services. No wonder families and businesses fled, taking their tax dollars and payrolls with them.
This is tragic for the Motor City, but this kind of financial trouble won’t end here. Detroit is just one of many local and state governments that are broke. Next in line: Illinois.
Unlike Detroit, changes in the manufacturing industry will not contribute to the demise of the Land of Lincoln. Rather, the profligacy and complacency of its leaders may.
It is no secret that Illinois is in debt; the state’s Comptroller estimates it to be approximately $160 billion. Nearly $100 billion of this stems, like Detroit, from unfunded pension costs.
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