Detroit's Bankruptcy Could Be the Best Thing That Ever Happened There
On the morning of July 18th, the city of Detroit filed for Chapter 9 bankruptcy, making it the largest city in U.S. history to do so. After more than 60 years of financial mistakes and turmoil, Governor Rick Snyder viewed bankruptcy as the final and best available step to solving the city's crisis. Detroit, one of the country's largest centers of the auto industry, even in the recent past has been through financial distresses as the auto industries were bailed out and only pieces of the city's overall budget situation were brought to light. Many view this bankruptcy a catastrophic blow to the city and its residents, but I would argue that this may be the best possible scenario. After hitting rock bottom, Detroit has the opportunity to recognize its mistakes and rebound in a huge way.
As politics has become a murky swamp of partisanship and frustration, the simplest solution for many is to blame the ideology opposite theirs. Democrats gaze at the situation in Detroit and blame a lack of sufficient government intervention for the city's troubles, while Republicans place the blame on big-government policies that have resulted in a "too-big-to-fail" mentality. Both sides have been willing to only skim the surface of Detroit's issues in order to skirt the responsibility that may come with confronting them head-on. While countless factors have been blamed — the failing auto industry, public-sector employees, unfunded pensions and liabilities, too much government, too little government, the weather on any given day — and some may be partially responsible, the nitty-gritty details of this fiscal fiasco show that what it really comes down to is a lack of common sense. Remember that phrase mom would utter whenever you got your hands on a little cash — "Don't spend your money before you earn it"? Now is when most of us wish we had been paying attention to her words.
As a teenager, I can understand politicians' desires to spend money irrationally. I can walk into the mall with my friends and, even without seeking them out, instantly spot three different things I "have" to have. I can grab them off the racks and continue browsing the store, picking up more items until I can't see over the pile in my arms. Approaching the checkout line, I realize that my weekly allowance doesn't even come close to covering the cost of my necessities plus the various wants I've thrown into the mix. My solution? It's simple! Just whip out my shiny new credit card and with one swipe, the total turns to 0. With such an easy fix to such a looming total, why would I choose to spend the money I have rather than buy it on credit and pretend it disappears?
This is the situation in which we find so many elected officials today. They've developed shopaholic-like habits that lead to destructive policies that lead to disastrous situations for the constituents that elected them in the first place. The residents of Detroit are being forced to deal with the collapse of their city's economic situation because for years, their leaders have failed to take the tough steps. Their leaders have failed to step in and stop the out-of-control spending. Whatever the ultimate cause of Detroit's bankruptcy, the root of the problem comes down to a lack of responsibility when it comes to spending other people's money. If your city brings in a certain amount of dollars each month, then only that amount should be spent. This bankruptcy gives Detroit the chance to set itself down this path.
While the situation may seem bleak on the surface, perhaps this bankruptcy is the best thing that ever happened to the city of Detroit. Perhaps this will be the wake-up call that its leaders needed to realize the error of their ways in allowing such fiscal insanity to ensue under their supervision. Perhaps this will be the bottom that Detroit needed to reach before it could begin working its way back up. Perhaps the city will lead by example and other cities facing similar situations will follow Detroit's lead or even tackle their financial issues early on. Good can always come out of a situation, no matter how dark, and this happens to be one that I believe can lead to sustained success in the future.