Detroit, Michigan, files for bankruptcy, becoming the largest US municipal bankruptcy ever at $18.5 billion

In 2012, President Obama gave a speech in which the president boasted that he ‘refused to let Detroit go bankrupt’ following his ‘revival’ of the auto industry (through absorbing corporations into the bloated government system). While indeed a speech that was focused on his ‘revival’ of the auto industry through expanding government further into the pants of private business, like a TSA agent patting down an attractive woman, this video is critical as it highlights the blatant facade that the US economy was ‘recovering’ with the help of Big Brother Obama and the help of the US government. This is in sharp contrast to reality, of course, which shows that the $83 billion in public taxpayer funding to the mega banks that finance the Mexican drug cartels on record is not a good investment — let alone the bloated Federal Reserve system that acts as a colossal leech on the income streams of average Americans.

Facing billions in debt, Detroit filed for Chapter 9 bankruptcy protection in federal court on July 18th, 2013 in what amounts to another mega bailout for an entire city that is the absolute epitome of a collapsed society. We’re talking record crime rates, which data shows is the result of insane gun control laws that stop law-abiding citizens from protecting themselves from gang members and drug dealers (as usual), and we’re also talking complete government incompetency. Or worse, complete government corruption.

Once upon a time Detroit was a symbol of everything that America was doing right, but was transformed into a rotting, decaying, post-apocalyptic hellhole.  Detroit was once the fourth-largest city in the United States, and in 1960 Detroit had the highest per-capita income in the entire nation.  It was the greatest manufacturing city the world had ever seen, and the rest of the globe looked at Detroit with a sense of awe and wonder.  But the city of Detroit  became a bad joke to the rest of the world in 2013.  Unemployment was rampant, 60 percent of the children were living in poverty and the city government was on the verge of bankruptcy.

Back during the boom years, Detroit was known for making great cars.  In 2012-13, it was known for scenes of desolation and decay.  It was full of vandalized homes, abandoned schools and empty factories.  The following description of what Detroit looked like at that point is from an article by Barry Yeoman

It’s hard to describe the city’s physical landscape without producing what Detroiters call “ruin porn.” Brick houses with bays and turrets sit windowless or boarded up. Whole blocks, even clusters of blocks, have been bulldozed. Retail strips have been reduced to a dollar store here, a storefront church there, and a whole lot of plywood in between. Not a single chain supermarket remains.

So what caused the downfall of one of the greatest cities on earth? Well, here is a hint… Between December 2000 and December 2010, 48 percent of the manufacturing jobs in Michigan were lost. When you are a manufacturing area, and you lose half of your manufacturing jobs over the course of a single decade, of course things are going to get really, really bad. So just how bad did things get in Detroit?

#1 Detroit was once the fourth-largest city in the United States, and it was once home to close to 2 million people.  But over the last several decades people have been fleeing in droves.  According to the 2010 census, only 713,000 people now live in Detroit, and city officials admit that the population has probably slipped under 700,000 at this point.

#2 The population of Detroit declined by about 25 percent over the decade prior to bankruptcy.  The last time the population of Detroit was that low was all the way back in 1910.

#3 In 2013, Detroit was only the 18th-largest city in America.  It is now smaller than Austin, Texas and Charlotte, North Carolina.

#4 Back in 1960, the city of Detroit had the highest per-capita income in the United States.

#5 In 2013, the unemployment rate in Detroit was more than 18 percent, which is more than twice as high as the nation as a whole.

#6 According to a report approximately 60 percent of all children in Detroit live in poverty.

#7 Approximately one-third of Detroit’s 140 square miles were either vacant or derelict in 2013.

#8 The city government of Detroit closed dozens of schools and decided to cut off public services to the “heavily blighted areas“.

#9 According to one estimate, there were 33,500 empty houses and 91,000 vacant residential lots in the city of Detroit in 2013.

#10 The median price of a home in Detroit was just $9,000, and there were some areas of Detroit where you could buy a house for $100.

#11 There were more than 85,000 streetlights in Detroit, but thieves stripped so much copper wiring out of the lights that more than half of them were not working.

#12 Mayor Bing announced a plan to reduce the number of streetlights in the city of Detroit to just 46,000.

#13 According to one very shocking report, 47 percent of all people living in the city of Detroit were functionally illiterate at that point..

#14 The murder rate in Detroit was 11 times higher than it was in New York City.

#15 There were 377 homicides in Detroit in 2011.  In 2012, that number rose to 411.

#16 Justifiable homicide in Detroit rose by an astounding 79 percent during 2011.

#17 In one recent year, the rate of self-defense killings in the city of Detroit was 2200% above the national average.

#18 Ten years prior to bankruptcy, there were approximately 5,000 police officers in the city of Detroit.  In 2013, there were only about 2,500 and another 100 or more were eliminated from the force soon after that report.

#19 Due to budget cutbacks, most police stations in Detroit were closed to the public for 16 hours a day.

#20 Crime got so bad in Detroit that even the police were telling people to “enter Detroit at your own risk“.

#21 At one point, 100 bus drivers in Detroit refused to drive their routes because they were afraid of being attacked out on the streets in broad daylight.  The head of the bus drivers union, Henry Gaffney, said that the drivers were literally “scared for their lives“….

“Our drivers are scared, they’re scared for their lives. This has been an ongoing situation about security. I think yesterday kind of just topped it off, when one of my drivers was beat up by some teenagers down in the middle of Rosa Parks and it took the police almost 30 minutes to get there, in downtown Detroit,” said Gaffney.

#22 There were reports that gangs of young men with AK-47s were terrorizing gas stations all over Detroit.

#23 Detroit was once known for making some of the greatest cars in the world.  In 2013, it was known around the world as a dumping ground for the dead

From the street, the two decomposing bodies were nearly invisible, concealed in an overgrown lot alongside worn-out car tires and a moldy sofa. The teenagers had been shot, stripped to their underwear and left on a deserted block.

They were just the latest victims of foul play whose remains went undiscovered for days after being hidden deep inside Detroit’s vast urban wilderness — a crumbling wasteland rarely visited by outsiders and infrequently patrolled by police.

#24 Detroit’s public schools were an absolute nightmare.  The following is from one of my readers that actually attended one of the “best” public schools in Detroit…

The school was a new seven story building just a couple of years old. The bathrooms would often lack toilet paper & soap beyond the second floor (the main floor), the bathroom sinks would often not work. The water fountains on north side of the building on from the third floor & up did not work. The elevators would constantly break down. I even got stuck on the elevator before. I almost tripped down a half a flight of stairs because the elastic seal (it was the metal bar at the front of a treader of I don’t know the name of it.) the stairs was not properly installed.

Students would often have sex on the stairs & throughout the school. Parents actually called the school many times & reported kids having sex on the stairs because all of them had glass windows 270 degrees.

#25 There was a move to quickly begin water shutoffs to “protect the city’s budget.” Yet there was still money to be found by the city to purchase hydrofluorosilicic acid (fluoride) from private companies to add to the water supply. In fact, it’s mandated by Detroit city ordinance:

§ 56-2-58 Authorized. The board of water commissioners, in cooperation with the department of health of the city, is hereby authorized and directed to institute fluoridation of the water supply of the city and to do all things necessary to carry out the directive set forth in this section.”

Rich Tucker explained what he thought happened in the Morning Bell:

Many of Detroit’s problems resulted from a lack of political competition. Democrats have dominated the city council, and there’s been a Democratic mayor since 1962. One-party government quickly became bad government, featuring a stream of liberal, blue-state policies such as sweet deals for government unions. Now, though, the bill has come due for these liberal policies.

“For decades, Detroit sustained itself through the usual suspects of bad fiscal management: unaffordable borrowing, state grant schemes, raising taxes, and deferring public pension contributions rather than cutting city spending,” explain Heritage’s Alison Acosta Fraser and Rachel Greszler. “But Detroit’s tragic downward cycle has reached its end.”

There’s much Washington should learn from Detroit. The federal government has a staggering national debt of more than $17 trillion, larger than the U.S. economy. Fraser and Greszler note that future federal spending “will be driven to the breaking point” by entitlement programs.

In January 2014, the judge in the Detroit bankruptcy case struck down a controversial proposed settlement in which the city would have paid two big banks $165 million. In 2009 the city reached a deal with Bank of America and UBS promising the banks the future flow of casino tax money in return for $300 million. Judge Steven Rhodes ruled that the deal likely would not be allowed to stand under the city’s bankruptcy reorganization. He also rejected a proposed settlement that would have resolved the original deal for $165 million, even though the bankruptcy court’s mediator had recommended that Rhodes approve the settlement.

The decision was a major victory for the city’s employees and retirees who face deep cuts in pension benefits as part the bankruptcy. It meant that the big banks are essentially unsecured creditors along with the retirees. Had the judge upheld the settlement, the banks would have collected money ahead of the pension plans as part of the bankruptcy process.

The international bankers killed Detroit. How? By gutting America’s manufacturing. In the 1980s and 1990s, the international bankers decided to destroy America’s industrial might. So they forced neo-liberal “free trade” policies on the US. Those policies were designed to make American industry uncompetitive, and to move manufacturing overseas.

By the end of the 20th century, good jobs for ordinary American workers were already becoming a thing of the past. Working-class people in cities like Detroit were pauperized. Henry Ford’s social revolution ended, and the broad, inclusive American middle class began to die. The working-class neighborhoods of Detroit were destroyed by mass unemployment just as surely as if they had been hit with nuclear bombs. People of color suffered the most. And the poverty-bombers were Henry Ford’s old enemies: The international bankers, who were willing to sacrifice the lives of millions in pursuit of their “New World Order” global dictatorship.

In 2018, five years after the city declared bankruptcy, the turnaround has been remarkable, with major investments that have brought new jobs, the rebirth of neighborhoods whose best days were half a century ago and the restoration of street cleaning and lighting — services so basic yet important to a sense of community. It also cost some people more than others.


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