Back in the campaign season of 2012, President Obama was attending many campaign events touting how he would “save Detroit” and not let it go bankrupt. Even in one of his weekly addresses to the American people, Obama vilified his opponent Mitt Romney for a 2008 NY Times Op Ed piece in which Romney suggested a managed bankruptcy could bring more financial standing for the ailing auto industry and possibly give the industry a better chance at financial success. Obama argued, “We refused to throw in the towel and do nothing. We refused to let Detroit go bankrupt. We bet on American workers and American ingenuity, and three years later, that bet is paying off in a big way.”
This week it was announced that the largest city in U.S. history was filing bankruptcy despite Obama’s claims the he was saving it. Imagine that. Detroit is a shell of what was once a thriving city, but when one town becomes the haven of just one industry, unfunded pensions and historically run by liberal leaning leadership it begs to question how it avoided bankruptcy this long? Public union pensions were also the demise of Stockton, California who last year filed for bankruptcy. How can any city justify paying the retiring public workers more than what they paid in? What city can survive retirement pensions of over $100,000 a year and in some cases pay their public employees over $300,000 a year in salaries? How about the fact that in this bankruptcy the bond holders whose money (over $135 million) was used to help pay the pension plans have been told they will only get 17 cents on the dollar but the pension plan CalPERS will received 100% of its money?
Looking at the federal Government today it is a wonder if this is the same mindset of spending more, promising more and taking in less. Like theses public union pensions that are out of control, our federal government has also been spending on money on frivolous agendas for many, many years. It’s only common sense that after over $17 trillion spent that at some point the money tree of the taxpayer pockets will produce no more. Like Detroit, tough choices will have to be made on how to cut back the spending. Liberals and some Republicans scream when any notion of their projects have to be examined for fraud, waste and usefulness and yet the American people who pay the taxes are expected to just sit back and accept the relationship of paying the bills.
The notion that out-of-control spending on union pensions, pork-filled bills, defense or entitlement programs is “accepted practice” is asinine at best. There are too many wasted and duplicated programs that can be cut and departments that can be deleted and I fear soon that we will no longer have a choice. People are getting tired of the mindset that only the public sector and unions have the right to over-inflated salaries, and that taxpayers are supposed to accept the terms and write those checks.
The city of Detroit is $18 billion in debt and looks like a scene from a war movie, filled with blight and destruction. It should not be a surprise that so many middle class suburban families got tired of the terms of the relationship and moved out of state.
Detroit and Stockton are now America’s version of Greece—and like Greece, the entitlement mentality and socialist rules did not work. As Margaret Thatcher famously said, “The problem with socialism is you eventually run out of other people’s money.” It appears that Detroit was the latest to see the well running dry and the rest of the United States could soon see the effects of this same dilemma very soon. Question is, will the American people become involved and voice their concerns before it is too late?
There is a notion that our Government will bail out Detroit to save the pensions, which to me is nothing but a slippery-sloped precedent. What will stop Stockton and other poorly managed cities, also funding outrageous pensions, from demanding the same? Where will that end? And the more important question is why should taxpayers be asked to pay for gross mismanagement whether on a city, state or federal level?
Stay tuned—this could unfortunately become an ongoing saga.
Meanwhile, be sure to watch Steven Crowder’s latest “Pure Detroit” video: