Heartland Institute Experts React to Detroit Bankruptcy

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Christine Riesprofessor in the School of Economics, provided commentary on the city of Detroit filing for bankruptcy in the past week:  “Those of us who work more closely on state and local economic and reform issues know that Detroit is the first of many. Nearly all reform controversies come down to taxpayers versus unions – especially public sector unions. In my areas of engagement, educational reform and tax reform, all of the well-funded opposition to reform comes from various public-sector employees’ unions.

We are relatively successful in keeping the train on the rails in Georgia and attract population and companies from states and cities who are failing in the taxpayer/unions battle. But, the ultimate question is whether states are really free to be laboratories of democracies. Will the failing cities and states be deemed ‘too big to fail.’ I’ll be watching in the next weeks and months for federal government backdoor-bailouts of Detroit. Will the teachers, state government employees and taxpayers of Georgia and other disciplined and frugal states, eventually pay for the less-disciplined in Detroit….and those that follow?

The White House response? Not promising.  'While leaders on the ground in Michigan and the city’s creditors understand that they must find a solution to Detroit’s serious financial challenge, we remain committed to continuing our strong partnership with Detroit as it works to recover and revitalize and maintain its status as one of America’s great cities,' said Amy Brundage, a White House spokeswoman. This means Georgians pay.”  Source:  Somewhat Reasonable, July 19, 2013.

Additional Information

Groups

Ivan Allen College of Liberal Arts, School of Economics

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Keywords
Detroit bankruptcy, tax reform
Status
  • Created By: Claire Woodring
  • Workflow Status: Published
  • Created On: Jul 24, 2013 - 5:56am
  • Last Updated: Oct 7, 2016 - 10:26pm