Wednesday, April 4, 2012

Detroit steaming toward financial collapse

The city of Detroit is on a vector toward financial collapse and it doesn't look like any of the parties involved have any idea what to do to change course, slam on the brakes, or even just downshift.  It is full speed ahead, into the wall.  Brace for impact.

After decades of a declining population, a declining tax base and rising costs for city services, there are no quick fixes, and unfortunately there isn't enough time for any slow fixes.  This is like watching a vehicle crash test in super slow motion.  You know the car is heading into the wall with a dummy in the driver's seat.  On the other hand, in Detroit the car is heading into the wall but no one is in the driver's seat.  Everyone is a passenger.

The last estimates I read were that the city is about $10 billion in debt and that the city spends about a $1 million more than it takes in every three days.  It can't go on like this much longer, maybe a couple few weeks before financial Armageddon.

I don't want to get too deep into the blame game for how it got this screwed up. I'll just say, as the population shrank, the city did not. And by letting the city become dominated by vacant lots and empty buildings, the city has forfeited any semblance of efficiency in providing services to those who remain.  Garbage trucks have to go down streets where just a few houses remain occupied.  Police patrol blocks in which most houses are empty and waiting to be tore down.  It can look almost apocalyptic in places.  As much as 40 square miles of Detroit real estate sits empty and abandoned.

A big part of the problem is poor leadership and rampant corruption over years that diverted diminishing resources away from neighborhoods and infrastructure into the pockets of crooked politicians and businessmen willing to "pay to play".  The residents of the city may want to lay their problems at the doorsteps of the suburbanites that abandoned the city, but the residents of the city were complicit in the collapse if for no other reason than they continued to vote in unqualified and unethical civic leaders who pillaged the coffers and made the first priority to promote their friends and business associates.

Enough of that.  I wanted to propose a few ideas for the city of Detroit as it ventures into bankruptcy and eventual reorganization.

1) Allow the people who work in Detroit and pay the 1.5% non-resident income tax to vote in city elections. If Detroiters want suburbanites to help, perhaps the best way would be to give those who drive into the city to work a chance to help elect leaders.  This idea might shock some residents, but they need to face the fact that the residents have done a spectacularly poor job of picking leaders for whatever reasons.  It is time to enlist the ones who are helping pay the bills.

2) Sell off some of the city's assets.  Belle Isle comes to mind. So does the City of Detroit water system.  So does the City Airport.  So do the 40 square miles of city owned property also come to mind.  How can a municipality that is flat-ass broke own 40 square miles of land is beyond my comprehension.  WTF are they waiting for to sell?  

3) Relocate people from the mostly abandoned neighborhoods and give them a house and real estate in other neighborhoods that are still viable.  This is somewhat akin to defragmenting a hard drive on a computer to make large usable blocs of empty space.   Once large blocs are vacated of people, then bulldoze what is left into large blocs available for redevelopment.

4)  Shrink the city.  Let adjoining cities in Downriver, the East side, the West side, and Warren annex property in Detroit.   All are welcome to buy a piece of the perimeter.

5) Allow businesses to hire people for daily jobs and pay the workers cash at the end of their shift.   There is so much work to do in the city and a lot of unemployed people looking for work that this idea is a natural.  The way to kick start the economy is to invite people back into the workforce by allowing them to work day labor jobs for cash, and not get everything hung up in red tape and paperwork.  It won't do residents much good if the city gets funding to fix a road or tear down vacant houses and all the city does is go out and hire a suburban contractor to do the work with a suburban workforce.  And if all the work is funneled to union contractors,  it leaves the unemployed on the sidelines.  Most of the desperate unemployed  can not wait two weeks for their first pay check.  Until they become more established, they need to be paid in cash every day they work.

6) Combine the 46 separate unions in the city into one or just a few.   There is no feasible way a city facing so many huge financial problems can take on the task of negotiating with dozens of different unions to fix the finances.  The unions need to combine or face the specter of total annihilation when the bankruptcy hits.

7) Eliminate many of the city's stoplights and replace them with 4-way stop signs or Yield signs.  The city was made for 3 million residents but only about 700,000 live there anymore.  There is no justification for many of the stoplights dotting the side streets and avenues.  By eliminating many of them, we could improve traffic flow and reduce maintenance costs and utilities.

8) Do a better job of collecting taxes due to Detroit from both the residents who work outside the city and from suburbanites who work within the city.

Well those are a few ideas, I am sure everyone else can come up with a few more ways to help revive Detroit and make it live long and prosper..   Can we do it? Yes We Can..      



  

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