Helping Detroit

July 19th, 2013 at 12:19 pm

I’ll have a longer piece up shortly about the unfortunate, albeit predictable, developments in Detroit.  There’s a fair bit of happy talk out this AM about how bankruptcy provides a clean slate, and there’s some truth to that.  But there’s a lot of pain between here and there, especially for stakeholders with public pensions and other public sector workers, not to mention creditors of unsecured debt.

Should the US government sweep in and bail the city out, like Presidet Ford did for NYC in the mid-1970s?  Unlikely this Congress would go there and while there have actually been very few municipal defaults in the USA (five since 1970), there is a process–Chapter 9 of the bankruptcy code–which Detroit will follow to discharge unsecured debts and restructure its liabilities.

But that doesn’t mean DC should wash its hands of this city in need.  Instead, I propose “Detroit Works!”–a temporary public jobs program to get the un- and underemployed of the city back to work repairing their city’s damaged infrastructure, its parks, streetlights, and urban blight.  It’s a great way to marry a problem with a solution, and one that helps the people of the city build back their own incomes along with their city.

But didn’t you just say Congress wouldn’t help Detroit?  No, I said it wouldn’t bail out their debts.  I didn’t say it wouldn’t help them pull themselves up by their bootstraps.

OK, I’m not saying they would either.  But let’s try and see what happens.

Who’s in with me??!!

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6 comments in reply to "Helping Detroit"

  1. SeattleAlex says:

    In! Let’s be honest though if lawmakers haven’t supported Works programs in their own states and districts why would they do it for Detroit??

  2. Joe says:

    Ford bailed out NYC? If you mean made loans that were fully paid back with interest, yes. Handing NYC money to pay debts and build infrastructure with no strings? Never happened.

    So Feds should lend Detroit money for your “works” project? Since Detroit is already stiffing lenders here, what interest rate do you think would be appropriate for said loans?

    If you think it should be a “gift” (liberal speak, an “investment”) why should taxpayers from areas already struggling with their own infrastructure, schools, and pension obligations hand their hard earned money to a city that has been mismanaged for nearly 60 years?

    Detroit, first and foremost must shrink and that will mean using their own resources to condemn neighborhoods, move out isolated residents and turn acreage into parkland or auction it off to developers who commit to tenants and business development.

    Detroit didn’t get hit by an accident or natural disaster. It is a city unable to save itself from itself and there is no indication that anything has changed.

  3. Robert Wrench says:

    I’m in,even though I’m retired. I’ve lost a fair part of my retirement due to less than perfect choices, but Detroit Works is a worthwhile choice. I’m willing to help pay a bit of the cost, even if not asked or required. That’s because I am not suffering as much as many of Detroit’s citizens. Detroit Works can work and I hope Washington listens for a change. Government can and should help when it can. Thanks Jared for making the case.

  4. David says:

    Detroit has suffered from a variety of issues – economy, white flight, racist black leaders, mismanagement, unions, etc. Bankruptcy is not the only thing needed. The city also needs new leaders who do not bring about a change from the leaders of the past 30-40 years.

  5. save_the_rustbelt says:

    The jobs needed in Detroit are more FBI agents to sort through the criminal mess.

    Credit to President Obama, he has committed resources resulting in numerous indictments and conviction so far (following up similar actions by Bush).

  6. longwalkdownlyndale says:

    Sign me up. I doubt this sort of thing could get through Congress, but it certainly can’t hurt to try. Also why can’t we get one of these tech billionaires to start a new high tech university there. It must be super cheap to buy a big chunk of land (i bet the city could just grant of lease them a big chunk). Plus a vibrant campus, even if it’s small, would create a vibrant little neighborhood and you’re on your way.