Faced with a mountain of debt and burdensome union contracts, Detroit’s financial predicament appears similar to the one General Motors and Chrysler confronted during the economic meltdown. However, while the motor companies received a bailout, the Motor City likely will not.
Although state and city leaders say they’re close to a compromise that would prevent the appointment of an emergency manager to take over the reins of city government, the deal would only give Detroit resources and support from state officials in Lansing — not cash. The automakers got a major boost from the U.S. government on their way back to profitability.
Thus, while Detroit’s elected leaders would remain in charge, the challenges the city still faces are massive as it suffers from declining revenue based partly on an ebbing population. The city is saddled with $13.2 billion in long-term obligations — including $5.5 billion in future medical liabilities — and $2.5 billion general fund debt. It’s at risk of running out of cash by the end of May.
The key point here is that Detroit’s elected thugs get to retain control. But is a solution at hand?
Angry over steps being taken due to a financial emergency in Detroit, New Black Panther Party leader Malik Shabazz declared he would burn the city down.
“This is white on black crime,” he said during public comment at the two hour meeting held Monday afternoon.
“This is white supremacy. Before you can take over our city, we will burn it down,” he added.
Perhaps such a conflagration and a little help from FEMA would make Detroit a new non-union center for producing trailers.