Topic: Detroit Becomes Largest U.S. City To File Bankruptcy - page 2. (Read 7423 times)

Governments (all governments) are addicted to your money.

It generally starts like this. Government has a "reasonable" (or at least one accepted by populace) tax rate.  Boom years come and govt doesn't save that excess tax revenue, or pay down debt, or lower rates to assist economic expansion.  No more money means only one thing = MORE MONEYZ TO SPEND!!!!!!!.  Some govt will actually not only spend the surplus loot pouring into coffers but then BORROW even more on top of the peaking tax revenue.  However they get use to this level  of expenditure.  Rather than see it as a windfall it becomes the new baseline.  Never mind that 10 years ago they govt got along fine with half the revenue this is now the absolute minimum that is "necessary" to keep the govt running.

Then the lean years come.  Same rate on less property and income means less tax revenue.  Why is the government going to do?  Cut spending?  HAVE YOU LOST YOUR MIND MAN?  The govt is "barely" surviving on the old tax base (no longer seen as a windfall it is the baseline) many in the govt had already planned to increase taxes or borrow more but this fall in revenue well that means there is no choice.  So rates go up and people leave (or recession continues) so what is the "only" option?  Obviously rates need to go higher and higher and higher and higher and higher.

Chicago is just excessively corrupt.  The exact same thing is happening at the federal level right now. 

Wow, what brainiac came up with that taxing strategy? 

The simple fact is Detroit has high property taxes and a 2.5% income tax, while none of the suburbs have any income tax. So anybody who earns income has an incentive to move out of the city, and the only people left are the ones who don't earn any money. Having a city full of unemployed people is a recipe for disaster.

This.  Pictures don't lie.

http://www.mackinac.org/images.aspx?ID=7453#1961

I predict more cities will file for Chapter 11.

Wow. It would take some real balls to invest in Detroit right now. Well, furthermore, to invest in any business in the USA right now takes balls, IMO.

Btw, anyone notice article today in WSJ talking about the effects of this on the European banks? Seems UBS was involved in lending to the Detroit muni back in the boom years.

http://online.wsj.com/article/SB10001424127887324328904578619993814520624.html?mod=WSJEurope_hpp_LEFTTopStories

As long as you aren't transmitting or receiving money outside your own country, I can't imagine they'd ever notice you. Just fire off some shots every now and then, set up road blockades with threatening graffiti and a barbed wire fence around the perimeter, and the police'll declare it too dangerous to patrol.


I mean - yeah, you'll probably eventually either be gunned down or imprisoned by federal forces, but YOLO. (or -- wait... so you should duck responsibilities and live a short, irresponsible life because you're mortal? I've never understood "YOLO"....)

I am unfortunatelly not sure about that. I know some things are more free there in US than here in Europe (some not on the other hand), but I guess by avoiding taxes, all their fascist registers etc., not recognizing SS homeland security forcers and other crap, I'd meet the SS homeland security forces sooner rather than later and probably end in some concentration camp special detention center.

Go for it. You can recognize the government as equally as they recognize you, and probably won't see official action for years, unless you're murdered... then it'd take a decade at least.

Any chance to buy a few blocks and declare independency on federal govenrment?

Is anyone really surprised by this?  Detroit has been a ghost town for years.  You can buy actual houses there for $5,000, but why would you want to?  People strip the houses for copper there and probably get away with it.  The city has been abandoning large portions of what used to be part of the city just because a) no one lives there any more and b) it can't afford to keep them up.

The only thing that surprises me about this is that it took them this long to declare bankruptcy.

Because we have >100% of GDP in federal debt when you combine state and local governments it is closer to 150%.  The only way you get out of that is the magic of inflation.  100% inflation (over say 15 years) means debt (which is not indexed to inflation) to GDP gets cut in half.

Only a matter of time before Robocop. 

Put your hands up for Detroit.

Chicago is ran by the same types that siphoned the last of the Soviet Empire..  selling the parking meter rights for 75 years to private owners than promptly spending the cash grab in a few years... 

pinata economics is what i call it

Keep your eye on Illinois then. Almost every major company there has fled to other states.

They still have 4 major sports teams so money is still flowing in some circles.  Maybe they just slice off the rotten part

There are so many cities in the USA, one down doesn't really matter, if a state is down, then it will be real news!

Unfortunately when it comes to evaluating the number of crimes , I think Detroit stands even worse , why?

In a normal country , when you know somebody will take action , people tend to report thefts rapes crimes...

In my beautiful country in easter europe , because we know once you're getting something stolen there are 0.001% to get it back and it's a waste to wait 4 hours to fill a report most of people just curse the thief and that's is. Same stand for women raped that are afraid to seek protection from an incompetent police force.

So , knowing how things go around here I sincerly doubt those numbers show even 1/5 of the actualy thing going around there.