Saturday, March 30, 2013

A Cautionary Tale: Detroit on the Verge of Bankruptcy

If you've got 5 minutes and 41 seconds I'll scare the heck out of you.

I realize it's Easter and Passover, not Halloween, but NPR put this horror story on the air Thursday anyway. Click it if you dare.

>>>> Bad Bets, Costly Promises Put Detroit On The Brink Of Bankruptcy <<<<

Of course this story is a tragedy.  A great city has fallen onto despair and large portions of the city are in ruin.  

But what's really frightening how many times the city leaders, mayor, city council and city fathers were warned of this apocalypse and how they always turned a deaf ear.  They steadfastly ignored the crisis and did absolutely nothing to prevent it.

FROM THE TRANSCRIPT:

HULETT: ...Joe Harris spent a decade as Detroit's auditor general. Shortly before he quit in 2005, he asked an outside consultant to look at the city's pension and retiree costs. 

 JOE HARRIS: This is his presentation to the council. 

 HULETT: The consultant's report was a shocker. It said the city was looking at more than $7 billion in retiree health care and fringe benefit costs it had not projected, let alone budgeted for. Seven billion dollars, seven times the city's annual operating budget. So, what was the response to this bombshell of a report? 

HARRIS: There was no response. There was no follow-up. There was no concern. There was no - not only by the council, there was no response by the administration either.

That's the trouble with government.  They always put off the tough decisions.  They don't listen. They never react. They deny there is a disaster and always proclaim that even IF a disaster is coming it's always dozens of years away.  They'll be plenty of time to fix the problem..... tomorrow.

This is, of course, what President Obama and the Democrats are doing today in Washington.  President Obama is kinda, sorta, maybe confident that the oncoming debt disaster won't happen until after he is out of office.  So he's ginning up the denial machine of loyal party legislators and pundits to echo his "do absolutely nothing" position. 

His position is all the more curious because only a few short years ago (before he was President) he and his fellow Democrats saw the disaster clearly and DEMANDED President Bush take instantaneous action!  In fact, Senator Obama and every single Democrat VOTED AGAINST RAISING THE DEBT CEILING.  

Of course Republicans all voted to raise the debt ceiling when George Bush was President but now that Barack Obama is President, they're all against it.

Politics rule, reality takes a back seat.  But the downfall is coming and all America is about to face a crisis that makes the current Detroit disaster look like.... an old fashioned Halloween horror story.

2 comments:

Lee Kiester said...

Consider that the US Federal Government does not ascribe to Generally Accepted Accounting Principles. So there is some doubt as to what is fiscally happening. That is the scary bit.

Chris said...

We're screwed