Detroit's Collapse - The Preventable Death of a Once-Great City

The Chapter 9 Municipal bankruptcy protection filing of the city of Detroit should send shock waves through every government employee, those that hold government-issued bonds, and anyone with government dealings. 

The collapse of the city’s finances is largely the result of unrealistic compensation and benefit promises made by government “leaders” who determined, if they gave the matter any thought at all, that they would be out of office by the time the house of cards collapsed.  Now, current employees of the city, its bondholders and creditors are on the hook for huge losses through no fault of their own. 

Thusfar, President Obama has acted appropriately, making it clear to Detroit that the bailouts he and his predecessor unwisely extended to financial and automotive titans will not be offered to the sinking city.  If it were provided a federal handout, the message that would be sent is that there are no consequences for irresponsibility and that others will pay for Detroit’s mistakes.

Will the lesson of Detroit be one that is absorbed by today’s elected officials?  I would not hold my breath, given that those who helped to foment the fall of a once-great city will be held responsible for none of their malfeasance.

Detroti's collapse is not limited to its inability to meet its financial obligations.  The Wall Street Journal ran a story this week about the city's abysmal law enforcement and lack of proper response to emergency calls to 911, noting that only 8.7% of crimes are solved and that the average time one waits for police assistance for the highest priority calls is 58 minutes.  An individual was quoted in the story as saying, "If you have  a heart attack in Detroit, you're dead".

It is a sad day not only for Detroit, but for our nation.  We are all in this mess together.