Superb piece or in-depth analysis by the Detroit Free Press here. My posts here, here, and here touched only the tip of the iceberg of disaster that was Detroit since the 1950s. A bottom-line comment:
"Detroit got into a trap of doing a lot of borrowing for cash flow purposes and then trying to figure out how to push costs (out) as much as possible,” said Bettie Buss, a former city budget staffer who spent years analyzing city finances for the nonpartisan Citizens Research Council of Michigan. “That was the whole culture — how do we get what we want and not pay for it until tomorrow and tomorrow and tomorrow?”And a startling observation: "Detroit now has twice as many pensioners as employees." Detroit is a harbinger of what's to come for other ill-managed American cities (and States). (For an early version of my analysis of Chapter 9 bankruptcy in the Stockton, California go here to download an article.)
Hi
ReplyDeleteProfessor Pryor!
Your work is amazing. Keep it up.
I see a similarity to the manner in which state & local governments continue to push out their pension liabilities. As long as they can actuarially say that their unfunded liability can be eliminated w/in 30 years, they fail to address the real funding problems.
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