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No federal bailout for the Motor City

With Detroit filing for Chapter 9 bankruptcy among $18 billion in unfunded liabilities, some on the political landscape are calling for the federal government to bail out the once grand Motor City.

Bad idea.

There is no dispute about Detroit's problems. Police response times average 58 minutes. The city's violent crime rate is triple that of some of the nation's most crime-ridden cities. Its city-run schools have produced just seven percent of 8th graders proficient in reading. Many city services are nearly nonexistent. Forty percent of street lights don't work.

Much has been written about what led to Detroit's financial demise, but they boil down to a few causes:

* Lack of political competition - Democrats have dominated city council and the city has had Democratic mayors since 1962.

* Unfunded pension liabilities - without a significant conservative party to counter the liberal majority, the city granted seemingly unlimited demands to its 47 unions.

* High taxes - Detroit has the country's highest property taxes on homes, the highest commercial property tax and the second-highest industrial property tax.

* Poor business climate - for all of the above reasons

Financier Steven Rattner, who helped administer the bailout of two of the Detroit-based American auto makers, said that, "apart from voting in elections, the 700,000 remaining residents of the Motor City are no more responsible for Detroit's problems than were the victims of Hurricane Sandy for theirs."

Detroit's problems are not based on natural disaster. These are the city's own doings and a federal bail out would transfer the city's own irresponsibility to taxpayers across the nation, who also are no more responsible for Detroit's problems than they are for Hurricane Sandy.

Fortunately, smarter heads seem to be prevailing in our nation's capital so far.

U.S. Treasury Secretary Jack Lew said this week that Detroit is going to have to work out its issues with its creditors on its own.


A federal bailout of Detroit could open a spigot as other debt-laden cities might flood U.S. taxpayers for bailout that a citizenry already $17 trillion in debt could ill afford to pay.

West Virginians should take note of the causes of Detroit's meltdown and make sure the same things don't happen here.



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