Detroit filed for bankruptcy because it’s reached the point where the city can’t pay its bills anymore, including pensions to municipal employees. It’s terrible and shows why pension funds must be invested even more conservatively, because municipal bonds are only as secure as the municipality’s finances.
There is no quick or painless solution, but it shouldn’t take long to motivate people to grab opportunities; find jobs; and make money.
Many are blaming the public unions, which is simplistic, because the problem actually began decades ago with increased foreign competition and gradual decline of U.S. manufacturing.
Actually, public and private unions have been doing their job well, while politicians, and sometimes corporate management, haven’t done their jobs responsibly, because they give in to labor demands, usually at the expense of taxpayers and the economy.
While America can’t compete with China, India, and, eventually, Africa on low prices, Americans can definitely manufacture better high-quality products world consumers would want to buy.
That’s why Washington ought to offer R&D tax credits to companies and entrepreneurs who agree to make their newest goods and services only in Detroit, later throughout the country, for a certain time period. Eventually, these items will also be produced abroad, but the newest products must only be made in America for some time.
Michigan and Detroit officials should also designate the city an urban enterprise zone with tax incentives to attract small, medium, and large businesses, as well as jobs and increased tax revenues.