By Neil Patrick
Not many people know that in the 1950’s Detroit was the fourth largest city in the US.
But almost everyone knows that the city is now bankrupt.
The mainstream media is focused on the crazy legal merry go round that has ensued in the wake of this collapse.
But a city is not really an entity on its own, although bureaucrats may find it more convenient to organize it that way. A city is the sum of all the people and lives it contains. And in the case of Detroit, these lives have been wrecked in varying degrees, not only directly by the bankruptcy, but also by the massive collapse of the government services which resulted from it.
I wonder if in the late 20th century, we had presented people with the reality of the condition of Detroit today, anyone would have taken it seriously? I rather suspect that the majority view would be something like, ‘Oh, that could never happen here’.
But it has and to my mind it presents a terrifying premonition of what the future might look like for many other cities in the US and other western countries. The UK already has what I would call it’s own ‘mini-Detroits’.
The bottom line is that if you worked or are working for any Detroit public organisation, you are unlikely to ever see more than a tiny fraction of your pension rights actually materialize.
You may be surprised to discover that 61 other cities in the US have a gap of more than $217bn in unfunded pension liabilities. That's right $217 billion!
And I’d like someone to tell us where that money is going to be found.
You might be tempted to think along the lines of, ‘Oh yes , my city is different, because…’ (add your excuse(s) of choice here). But is it really? Really?
The collapse of Detroit is multi-faceted. Of course it all began with the decline in the fortunes of the US car manufacturing giants based there. And there was corruption, and racial tensions, and a vicious circle of increasing government spending to try and prop things up, delivering worse and worse results, leading to yet more spending. And an exodus of the middle classes, in other words, the ones who contributed the biggest slice of the revenues that government uses to pay for things.
What can we do to protect ourselves from this type of risk to our lives? Well there are three groups of people who are not only unscathed, they are actually doing rather well in Detroit right now.
That’s urban redevelopment bosses, politicians. And lawyers.
Choose your poison.
And if you’re not scared enough already, just watch this to see the full HD version of a really scary movie about the tragedy of Detroit courtesy of Stefan Molyneux at Freedomainradio.com
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