Thoughts on the Decline of Detroit

Yesterday U.S. Bankruptcy Judge, Steven Rhodes, ruled Detroit could remain under the protection of the court as the city restructures its financial agreements. However, the city’s financial problems are really o-DETROIT-BANKRUPTCY-INFOGRAPHIC-570only endemic of a much larger issue that lurks in many American metro areas. Fact of the matter is, we’re running out of money to fund the American lifestyle, and many sheep in political and social circles are content to ignore the problem or insist they still be provided for.

On July 18, facing an estimated $18 billion in debt and liabilities, Detroit became the largest city in American history to file for bankruptcy protection. (The New York Post 2013) Part of yesterday’s ruling by Rhodes also proposed significant cuts to retiree and pension programs that have long been the staple of the city’s industry and are even protected by State law. In addition, Rhodes ruled that pensions are contracts just like any other and can be compromised in federal bankruptcy court, meaning Detroit retirees, including many who rely on less than $20,000 a year could see even less after the restructuring. The proposal instantly drew condemnation from special-interest groups that oppose any encroachment on benefits “promised” to them. Union attorney Sharon Levine said,

“We’re appealing all of the legal issues,” she said outside the courthouse. “We do believe that Chapter 9 is unconstitutional. We do believe that pensions are constitutionally protected… We don’t believe that the city negotiated in good faith and we don’t believe that you can find impracticability by coming in for 30 days and then running into bankruptcy.” (Wilson 2013)

At a press conference today Kevin Orr, the city’s emergency financial manager, said selling the city’s art collection was an option (so much for the arts and history), and also announced pension cuts would be necessary to emerge from bankruptcy. (Wilson 2013) Retiree representative, Ryan Plecha, responded stating,

“People gave their lives and their livelihood to the city of Detroit based on promises that they would receive pensions that would not be impaired or diminished by the constitution. And I think they feel like that promise has been taken away from them. And their financial ability to survive is now even more in jeopardy.” (AlHajal 2013)

So basically, despite the city leaders now openly stating after decades of mismanagement and political wrangling, there is simply nothing left at the financial tough for the sheep of Detroit to feed at. A city that has declined from a population of about 1.3 million to just over 700 thousand, where only 40% of streetlights function, and holds a staggering 18% unemployment rate simply no longer can support all the dreams that made the city what it once was. (Reeves 2013)

This will ultimately play out against the Union’s favor, as the State can no longer support the entitlement detroit-bankruptcy-525px193331-525x615programs promised. And there will be; lawsuits, counter-lawsuits, even more wrangling, and Detroit will die a little more with each passing year. But eventually people who were depending on those financial resources to carry them on into retirement will be left without the funds; and either forced into a lower level economic status, or to re-enter the work force and attempt to maintain a job at an advanced age when they should be enjoying their remaining years. But this problem is not only found in Detroit, it is only the largest. Seven other major American cities are not far behind Detroit and will soon be placed in similar situations. Places like Stockton, CA and Harrisburg, PA are also being forced to cut back in police, fire, and other civil services while considering cuts to pensions. America’s secret financial problems are finally boiling to the surface and in the years to come we will likely see more of such declines in other “great” American cities with increasing numbers of people falling economically. Is this an indicator into the decline of America domestically and financially?

Ultimately, citizens will need to understand that the financial advantages they may have enjoyed in the past, been promised by politicians today, will simply not be there tomorrow. And worse, there will likely be less for what we leave behind to our children. Consider what will be needed to carry on through the probable tough times. Do you have at least three month’s financial resources available in the event of job loss or worse? Can you garden to provide alternate food sources? Do you have stored food to carry you through six months, a year? Or do you have skills necessary to not only provide security for your family and community? These should all be the things we work on that establish a more independent lifestyle, and less governmental reliance.

Works Cited

AlHajal, Khalil. Unions, retirees prepare for appeal after Detroit ruled eligible for bankruptcy. December 3, 2013. http://www.mlive.com/news/detroit/index.ssf/2013/12/unions_retirees_prepare_for_ap.html (accessed December 3, 2013).

Reeves, John. 19 shocking facts about Detroit’s bankruptcy. December 3, 2013. http://www.usatoday.com/story/money/personalfinance/2013/12/02/19-facts-about-detroit-bankruptcy/3823355/ (accessed December 3, 2013).

The New York Post. Detroit declares bankruptcy, becoming largest city in U.S. history to go belly up . July 18, 2013. http://nypost.com/2013/07/18/detroit-declares-bankruptcy-becoming-largest-city-in-u-s-history-to-go-belly-up/ (accessed December 3, 2013).

Wilson, Reid. Judge declares Detroit eligible for Chapter 9 bankruptcy . December 3, 2013. http://www.washingtonpost.com/blogs/govbeat/wp/2013/12/03/judge-declares-detroit-eligible-for-chapter-9-bankruptcy/ (accessed December 3, 2013).

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