Have you heard of Meredith Whitney?
Two years ago, this brilliant economist and investor told “Sixty Minutes” that due to their unsustainable spending practices, many cities and towns across the country would soon be in financial distress.
This infuriated the administration.
According to the president, his “tax and spend” policies have led to a “slow recovery.”
The administration’s reaction coupled with the mainstream media’s total support, was instantaneous and swift. Whitney was personally attacked and unmercifully vilified as an incompetent fear-monger.
Just as she predicted, numerous California cities and towns have filed for bankruptcy protection this year.
Last week, Moody again downgraded the U.S., and Detroit filed for the biggest bankruptcy in US history. Meredith Whitney was right after all.
In 1966, after graduating from dental school, I was stationed at Selfridge Air Force Base, 30 miles from Detroit. Michigan was truly a wonderful place to live, work and raise my family.
Steve Aronowitz, a great teacher and friend was also my sons’ “sleep-away” camp counsellor. Sure he helped develop their athletic skills, increased their self-confidence and taught them how to work within a group.
But because of him, one of my sons returned home from Camp Birchmont a devoted, enthusiastic and rabid Detroit Tigers baseball fan. Steve and my son had to be the only Tigers fans in all of Great Neck. My younger son even attended University of Michigan. We were truly a Michigan family.
Unfortunately, the city of Detroit that I grew to love 45 years ago is long gone. It’s pathetic to watch such an iconic American town, with its wonderful residents, its great history, culture, parks, teams, businesses and charm, just disintegrate before my very eyes.
That’s what happened when administration after administration made extravagant promises that they knew they couldn’t keep. Their solution of tax increases only made things worse by driving both residents and businesses out of town. They excused a failing educational system and allowed crime increases to go unchecked for decades. Every imaginable liberal gimmick was tried. Spend more. Raise taxes. Be politically correct. For 40 years, free market capitalism was never considered and now look at the results.
1 – 40 percent of Detroit’s street lights don’t even work. Do you believe that?
2 – Police response time is five times the national average. Many residents and businesses are actually hiring their own private police officers.
3 – 78,000 of their buildings are abandoned or uninhabitable. Really? Check the Wall Street Journal.
4 – Total property tax collection has fallen by 20 percent.
5 – Yet, Detroit’s tax rates are still the highest in Michigan.
6 – In 1950, their population was 1.8 million. Today, fewer than 700,000 live there.
7 – Both their crime rate and school system are considered the worst in the nation.
8 – 66 percent of the city’s ambulances don’t even operate.
This is what happens when a city takes big government solutions to their ultimate extreme.
1 – Even after the state of Michigan gave Detroit a $130 million dollar cash infusion, they will still finish the fiscal year owing $47 million dollars more! They need a rehab, not an enabling program which gives them even more money to fuel their spending addiction.
2 – According to the Wall Street Journal, in four years their deficit will grow to $1.35 billion dollars and their total liabilities will be $18 billion. Amazing.
3 – Legacy costs (pensions, healthcare, etc) comprise 42.5 percent of their entire current city budget. Tell that to the municipal unions. Amazing.
4 – By 2017, pension and healthcare costs will consume (sit down for this one) two-thirds of their entire tax revenue. That’s in four years.
Detroit’s new state appointed city manager has just filed for chapter 9 bankruptcy, the largest municipal bankruptcy in American history.
The $5.7 billion dollar liability for all (got that?) post-retirement health benefits may be cancelled. From now on, all retired city workers may have to pay for their own healthcare. That’s over $10,000 per year. It comes to one thousand dollars each month, just like many of us in the private sector pay.
Did you hear that, all you government workers? The $3.5 billion dollar pension liability, may also be drastically cut. And it’s creditors, such as bond holders, may see their investments drastically reduced. That’s called a “haircut.”
Everyone involved was responsible. It’s too late for the blame game. Years of out-of-control spending, huge tax increases, and municipal corruption have resulted in this national disaster.
Wake up Long Island:
1 – When you vote to raise your taxes again, think of all the families and businesses you are slowly forcing off Long Island, one tax dollar at a time. Got that Manhasset?
2 – When you promise huge unfunded pension and healthcare benefits, think of the next generation who will be paying for them.
3 – When you vote to add more government workers or teachers, their associated lifetime benefits will be paid by your children or grandchildren. Oh, I forgot, they will probably be living in Texas or Florida.
This is what happened in Detroit. It is happening on Long Island as well.
Dr. Stephen Morris DDS
North Hills
