# Detroit bankrupt
**URL:** https://boards.straightdope.com/t/detroit-bankrupt/663879
**Category:** Miscellaneous and Personal Stuff I Must Share
**Created:** [July 18, 2013, 8:45pm UTC](https://boards.straightdope.com/t/detroit-bankrupt/663879 "2013-07-18T20:45:21Z")
**Posts on this page:** 20
**Page:** 2
### Author:  [@Saint\_Cad](https://boards.straightdope.com/u/Saint_Cad)
#### Post date: [July 19, 2013, 6:54am UTC](https://boards.straightdope.com/t/detroit-bankrupt/663879/21 "2013-07-19T06:54:07Z")
One big problem is the high property tax rate in Wayne County. Why would anyone want to buy real estate (homes or otherwise) and have to pay thousands of dollars in back taxes? Giving some sort of tax breaks to people willing to buy homes there may just get people to buy homes there.
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### Author:  [@jz78817](https://boards.straightdope.com/u/jz78817)
#### Post date: [July 19, 2013, 11:59am UTC](https://boards.straightdope.com/t/detroit-bankrupt/663879/22 "2013-07-19T11:59:03Z")
> [@Spoons](#):
>
> As for Detroit, I’ll admit that I do not know enough about the city to comment knowledgeably. However, I have seen the city from across the river in Windsor; and I’ve been to Michigan, where I found vibrant cities such as Kalamazoo and Lansing. I would hope that the state government can step in (if they are allowed to), and help Detroit. It is the home of Motown, of historical “Detroit Iron” (i.e. classic cars), and it would be a shame if it were to be left to die.?
The state did try to step in, and was rebuffed at every point. Council’s message all along was “just give us money and we’ll fix it.” As if that was ever going to fly. Detroit “leadership” seems to think they’re “owed” something, no idea what.
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### Author:  [@Hari\_Seldon](https://boards.straightdope.com/u/Hari_Seldon)
#### Post date: [July 19, 2013, 12:03pm UTC](https://boards.straightdope.com/t/detroit-bankrupt/663879/23 "2013-07-19T12:03:38Z")
> [@Leaffan](#):
>
> So, the way I see it, people abandoned Detroit for the suburbs. The suburbs are under a different tax structure and don’t support Detroit proper.
>
> In Canada, provincial governments saw this coming a decade ago and forced amalgamation on municipalities. Toronto was forced to amalgamate with surrounding towns, forming the Greater Toronto Area (GTA), as were Ottawa and Halifax. There are no doubt others, but these three I’m aware of off the top of my head.
>
> This forced amalgamation was unpopular, however the benefits are now hugely apparent: the suburban taxpayers are now contributing to the overall tax revenue of the city core. There’s no benefit to moving to the suburbs because your municipal tax bill will still be supporting the city.
>
> In retrospect, this forced amalgamation was a stroke of genius. Had Michigan forced a similar amalgamation principle on Detroit and its suburbs they would not be in this mess today.
The forced amalgamation of Montreal was a disaster. First thing to mention was that there was already an overarching municipal council that was forcing the suburbs to pay taxes to support the central city. There was some grumbling, but it prevented serious fiscal problems for the city. Then the geniuses that run the provincial government decided that wasn’t enough. The problem was that they left all the existing structures in place so there are at least three levels of local government. And they are all corrupt. That is why Montreal has had three mayors this year. The anti-corruption squad in the provincial police that couldn’t find a corrupt official if their lives depended on it suddenly discovered an old bribery charge against the previous mayor after he threatened to do something about the corruption.
Incidentally, the island adjacent to Montreal (City of Laval) has also had three mayors since last December.
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### Author:  [@TruCelt](https://boards.straightdope.com/u/TruCelt)
#### Post date: [July 19, 2013, 12:33pm UTC](https://boards.straightdope.com/t/detroit-bankrupt/663879/24 "2013-07-19T12:33:55Z")
Detroit failed because it was based upon a single primary industry which began to source globally instead of locally. In about 1986, when I opened up the hood of my new Dodge Aries and saw the Mitsubishi engine inside, I knew Detroit was in major trouble.
Detroit was the world’s largest company town. When it’s primary industry began to fail it didn’t get on the horse and start marketing itself to new companies. Outside companies were intimidated by the thriving unions and expectations of living wages for blue-collar workers. It was much cheaper to build and staff the factories overseas where the living and safety standards are so much lower.
And for many decades past, Detroit had fallen for the old saw that local education should be geared toward the local job market. So they didn’t put an emphasis on intellectual achievement or college prep. This resulted in a large population prepared only for the jobs that were dying out.
The suburbs are not doing so well either. My Dad bought a beautiful estate in Orchard lake for 1.2M around 1988, and sold it for 550K in about 1999. He was incredibly relieved to get that much for it.
The last time I drove through Grosse Pointe, the quintessential wealthy neighborhood, there were 2-3 “For Sale” signs on every block. That was 6-7 years ago.
I’m frankly amazed that the city has managed to hold out this long.
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### Author:  [@ralph124c](https://boards.straightdope.com/u/ralph124c)
#### Post date: [July 19, 2013, 12:40pm UTC](https://boards.straightdope.com/t/detroit-bankrupt/663879/25 "2013-07-19T12:40:34Z")
How have American cities (which have gone into bankruptcy in the past) fared?
One example is Fall River MA-it went bankrupt in the Great Depression (1933).
Fall River NEVER recovered-its textile industry died out completely by 1995. It was never able to attract newer industries, despite all kinds of efforts; and its decaying infrastructure is not encouraging new growth. The latest nail in the coffin: the Federal Fisheries commission have announced new catch restrictions upon local fisheries-that means that the Fall River seafood industry will be effectively gone.
I suggest that this is what will happen to Detroit-the best thing for Detroit residents would be a loan program of some kind, to help them move to an economically viable area-it makes no sense to keep this corpse on life support.
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### Author:  [@jz78817](https://boards.straightdope.com/u/jz78817)
#### Post date: [July 19, 2013, 1:50pm UTC](https://boards.straightdope.com/t/detroit-bankrupt/663879/26 "2013-07-19T13:50:42Z")
> [@Leaffan](#):
>
> So, the way I see it, people abandoned Detroit for the suburbs. The suburbs are under a different tax structure and don’t support Detroit proper.
>
> In Canada, provincial governments saw this coming a decade ago and forced amalgamation on municipalities. Toronto was forced to amalgamate with surrounding towns, forming the Greater Toronto Area (GTA), as were Ottawa and Halifax. There are no doubt others, but these three I’m aware of off the top of my head.
>
> This forced amalgamation was unpopular, however the benefits are now hugely apparent: the suburban taxpayers are now contributing to the overall tax revenue of the city core. There’s no benefit to moving to the suburbs because your municipal tax bill will still be supporting the city.
>
> In retrospect, this forced amalgamation was a stroke of genius. Had Michigan forced a similar amalgamation principle on Detroit and its suburbs they would not be in this mess today.
If it was unpopular in Canada, it would practically cause a war if Michigan tried it. Like it or not, there is a very deep (real or perceived) racial divide between the City of Detroit and the suburbs. Cobo Center was _literally_ falling apart- the basement parking garage was unsafe and unusable, and the roof had numerous leaks- and yet council did nothing but throw temper tantrums at the prospect of a “regional authority” taking it over to put money into it for repairs and much needed upgrades. Former councilwoman (and delusional imbecile) Monica Conyers was screaming the loudest about how the suburbs were conspiring to “steal Detroit’s jewels.” As if Cobo Center was a “jewel.” :rolleyes: They just refused to accept that if people are going to give you money for stuff, they’re going to want a say in what that money is used for. Detroit basically responded “No! Just give us the money and don’t you dare tell us what to do with it.”
I don’t hold the people sitting there now (Mayor Bing and the current council) responsible for Detroit’s condition. I _do_ hold them responsible for thinking it’s better for them to captain a sinking ship all the way down than it is to let someone else steer for a while and right the ship. The idiocy with the Belle Isle proposal was proof of that.
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### Author:  [@Chefguy](https://boards.straightdope.com/u/Chefguy)
#### Post date: [July 19, 2013, 2:14pm UTC](https://boards.straightdope.com/t/detroit-bankrupt/663879/27 "2013-07-19T14:14:49Z")
If anyone is interested, read [Detroit: An American Autopsy](http://www.amazon.com/Detroit-An-American-Autopsy-ebook/dp/B008EKOP1I/ref=sr_1_1?ie=UTF8&qid=1374243150&sr=8-1&keywords=detroit+an+american+autopsy), by Charlie LeDuff. LeDuff is a Detroit native and Pulitzer Prize winner, who dissects the city’s ills very effectively.
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### Author:  [@Diceman](https://boards.straightdope.com/u/Diceman)
#### Post date: [July 19, 2013, 2:59pm UTC](https://boards.straightdope.com/t/detroit-bankrupt/663879/28 "2013-07-19T14:59:33Z")
> [@ralph124c](#):
>
> How have American cities (which have gone into bankruptcy in the past) fared?
> One example is Fall River MA-it went bankrupt in the Great Depression (1933).
> Fall River NEVER recovered-its textile industry died out completely by 1995. It was never able to attract newer industries, despite all kinds of efforts; and its decaying infrastructure is not encouraging new growth. The latest nail in the coffin: the Federal Fisheries commission have announced new catch restrictions upon local fisheries-that means that the Fall River seafood industry will be effectively gone.
> I suggest that this is what will happen to Detroit-the best thing for Detroit residents would be a loan program of some kind, to help them move to an economically viable area-it makes no sense to keep this corpse on life support.
Oh, please. The auto industry is doing fine. The problem is Detroit is try to run a city of 2 million with a population (and tax base) of 700,000.
It’s really not hard to see how this will work out. The creditors will get royally screwed, probably only recovering a few pennies on the dollar. The pensions won’t be hit that hard, but will still get screwed, and a bunch of old people will probably end up on welfare over this. In a civic bankruptcy, the top priority is on maintaining city services, so no they won’t be shutting down the bus lines. There have been plans to privatize the water and lighting departments, and under bankruptcy these will probably be realized. The city would save money by dumping the bloated beaurocracy that comes with these departments and hiring a company to manage these services instead.
There are already plans in place to clear out “unviable” neighborhoods in Detroit. As much as I hate emminent domain, this would be a case where it would be prudent to use it. The state should seize the land and help relocate the few residents that remain. Once they are out, the city would no longer have to provide utilities or other services to those areas.
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### Author:  [@Alley\_Dweller](https://boards.straightdope.com/u/Alley_Dweller)
#### Post date: [July 19, 2013, 3:10pm UTC](https://boards.straightdope.com/t/detroit-bankrupt/663879/29 "2013-07-19T15:10:47Z")
> [@Diceman](#):
>
> Oh, please. The auto industry is doing fine. The problem is Detroit is try to run a city of 2 million with a population (and tax base) of 700,000.
OK. So what caused all the people to leave Detroit?
Did they leave despite the abundance of automobile-related jobs that were available in Detroit?
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### Author:  [@Leaffan](https://boards.straightdope.com/u/Leaffan)
#### Post date: [July 19, 2013, 3:27pm UTC](https://boards.straightdope.com/t/detroit-bankrupt/663879/30 "2013-07-19T15:27:12Z")
> [@Diceman](#):
>
> In a civic bankruptcy, the top priority is on maintaining city services, so no they won’t be shutting down the bus lines. There have been plans to privatize the water and lighting departments, and under bankruptcy these will probably be realized. The city would save money by dumping the bloated beaurocracy that comes with these departments and hiring a company to manage these services instead.
Sounds like a decent plan for any city, really.
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### Author:  [@ralph124c](https://boards.straightdope.com/u/ralph124c)
#### Post date: [July 19, 2013, 3:30pm UTC](https://boards.straightdope.com/t/detroit-bankrupt/663879/31 "2013-07-19T15:30:41Z")
> [@Alley\_Dweller](#):
>
> OK. So what caused all the people to leave Detroit?
> Did they leave despite the abundance of automobile-related jobs that were available in Detroit?
Exactly..when Hyundai, Nissan, Kia, Toyota, VW, BMW, M-B announced plans to build North American plants, why did they NOT choose Detroit? Was it the abundance of trained workers, low taxes, excellent infrastructure that drove these firms to choose other locations?
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### Author:  [@Gordon\_Urquhart](https://boards.straightdope.com/u/Gordon_Urquhart)
#### Post date: [July 19, 2013, 3:37pm UTC](https://boards.straightdope.com/t/detroit-bankrupt/663879/32 "2013-07-19T15:37:35Z")
> [@ralph124c](#):
>
> Exactly..when Hyundai, Nissan, Kia, Toyota, VW, BMW, M-B announced plans to build North American plants, why did they NOT choose Detroit? Was it the abundance of trained workers, low taxes, excellent infrastructure that drove these firms to choose other locations?
We own three Fords, none of which were made in Detroit (I believe they were made in Kentucky).
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### Author:  [@adaher](https://boards.straightdope.com/u/adaher)
#### Post date: [July 19, 2013, 3:37pm UTC](https://boards.straightdope.com/t/detroit-bankrupt/663879/33 "2013-07-19T15:37:53Z")
> [@Alley\_Dweller](#):
>
> OK. So what caused all the people to leave Detroit?
> Did they leave despite the abundance of automobile-related jobs that were available in Detroit?
The decline of the auto industry was a factor. Also a factor was government corruption, the highest murder rate in the country, and high taxes for poor services.
Even if the auto industry was at 1960 levels, there still would have been major flight out of the city and people would have just commuted. Well off people do not live in high crime areas and auto workers are pretty darn well off.
When I lived in Louisville, I knew people who worked at the Ford plant. Very few lived in Louisville, and Louisville is a heck of a lot better than Detroit.
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### Author:  [@Terr](https://boards.straightdope.com/u/Terr)
#### Post date: [July 19, 2013, 3:48pm UTC](https://boards.straightdope.com/t/detroit-bankrupt/663879/34 "2013-07-19T15:48:07Z")
> [@ralph124c](#):
>
> Exactly..when Hyundai, Nissan, Kia, Toyota, VW, BMW, M-B announced plans to build North American plants, why did they NOT choose Detroit? Was it the abundance of trained workers, low taxes, excellent infrastructure that drove these firms to choose other locations?
Much cheaper labor elsewhere? From 2009, the report was that although the wages between UAW and Toyota in the US were similar (about $30/hr), when benefits were factored in, GM was paying $69 per worker and Toyota $48.
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### Author:  [@adaher](https://boards.straightdope.com/u/adaher)
#### Post date: [July 19, 2013, 3:50pm UTC](https://boards.straightdope.com/t/detroit-bankrupt/663879/35 "2013-07-19T15:50:41Z")
It wasn’t the price. It was the flexibility. Detroit had all kinds of rules that reduced productivity. Plus promotions based on seniority rather than merit.
It’s not as if Japanese workers are underpaid. These companies didn’t exactly have a culture of seeking out cheap labor. But they did demand that they be able to run their factories the way they knew how, and not with the productivity-killing work rules of the UAW.
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### Author:  [@Sunspace](https://boards.straightdope.com/u/Sunspace)
#### Post date: [July 19, 2013, 4:18pm UTC](https://boards.straightdope.com/t/detroit-bankrupt/663879/36 "2013-07-19T16:18:51Z")
A thread I started a while ago: [Why did Detroit decline relative to Chicago and Toronto?](http://boards.straightdope.com/sdmb/showthread.php?t=506603)
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### Author:  [@YogSothoth](https://boards.straightdope.com/u/YogSothoth)
#### Post date: [July 19, 2013, 4:50pm UTC](https://boards.straightdope.com/t/detroit-bankrupt/663879/37 "2013-07-19T16:50:34Z")
> [@fudrucker](#):
>
> Detroit failed because of forced socialistic policies.
>
> Of course. That’s how socialism works. If the government doesn’t like something, they simply force the citizens to comply with their illegal demands.
You know, you’re saying a lot of things, and I understand the words you’re using, but the ideas are nonexistent :dubious:
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### Author:  [@Ludovic](https://boards.straightdope.com/u/Ludovic)
#### Post date: [July 19, 2013, 4:55pm UTC](https://boards.straightdope.com/t/detroit-bankrupt/663879/38 "2013-07-19T16:55:46Z")
> [@fudrucker](#):
>
> If the government doesn’t like something, they simply force the citizens to comply with their illegal demands.
> [@YogSosoth](#):
>
> You know, you’re saying a lot of things, and I understand the words you’re using, but the ideas are nonexistent :dubious:
If the government does it, that means it’s not legal.
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### Author:  [@PastTense](https://boards.straightdope.com/u/PastTense)
#### Post date: [July 19, 2013, 5:00pm UTC](https://boards.straightdope.com/t/detroit-bankrupt/663879/39 "2013-07-19T17:00:50Z")
> [@Diceman](#):
>
> There are already plans in place to clear out “unviable” neighborhoods in Detroit. As much as I hate emminent domain, this would be a case where it would be prudent to use it. The state should seize the land and help relocate the few residents that remain. Once they are out, the city would no longer have to provide utilities or other services to those areas.
On the basis of population density, virtually all of rural America has lower population density than these “unviable” neighborhoods in Detroit. So do you think your proposal should be done for virtually all of rural America?
Of course not: rural America accepts a lower level of public services and lives within its means–while the big cities demand a Cadillac level of public services.
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### Author:  [@BobLibDem](https://boards.straightdope.com/u/BobLibDem)
#### Post date: [July 19, 2013, 5:47pm UTC](https://boards.straightdope.com/t/detroit-bankrupt/663879/40 "2013-07-19T17:47:00Z")
> [@fudrucker](#):
>
> Detroit failed because of forced socialistic policies.
>
> Of course. That’s how socialism works. If the government doesn’t like something, they simply force the citizens to comply with their illegal demands.
Good news! Your reflexes are fine! Now if only there was some thought process behind the words. Like exactly WHAT socialist policy you’re talking about.
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