In the wake of the city of Detroit filing for bankruptcy last week, over the weekend a blog post made its way around the internet. Michael Snyder wrote 25 Facts About The Fall Of Detroit That Will Leave You Shaking Your Head, and he stuns and dazzles with 25 facts that each give the reader a clearer understanding of the predicament Detroit faces as it nears collapse.
After the facts were all listed, Snyder speculated a bit, including this warning:
Detroit is only just the beginning. When the next major financial crisis strikes, we are going to see a wave of municipal bankruptcies unlike anything we have ever seen before.
And of course the biggest debt problem of all in this country is the U.S. government. We are going to pay a great price for piling up nearly 17 trillion dollars of debt and over 200 trillion dollars of unfunded liabilities.
All over the nation, our economic infrastructure is being gutted, debt levels are exploding and poverty is spreading. We are consuming far more wealth than we are producing, and our share of global GDP has been declining dramatically.
We have been living way above our means for so long that we think it is “normal”, but an extremely painful “adjustment” is coming and most Americans are not going to know how to handle it.
So don’t laugh at Detroit. The economic pain that Detroit is experiencing will be coming to your area of the country soon enough.
Then on Monday afternoon, Peggy Venable of Americans for Prosperity, Texas – tweeted the following:
Houston Muni Employees Pension System – 26,675 mbrs w/ assets = $2.3 B; liabilities = $3.8 B. Is Houston the next Detroit? #TXlege
— Peggy Venable (@pvenable) July 22, 2013
Every one of these numbers is something we need to take seriously and begin to address.
Spending at the city level is out of control. Local government has taken on too many endeavors and they have over-committed the city finances. Pensions are going to come due, as Bill King has been alerting us for years, and the city is going to be unable to cover its commitments.
The immediate reaction from our opponents is something like “no way, you can’t cut city services!” Well, that is not always what we mean when we talk about greater fiscal accountability. Before we cut any services, we should first find out if there are services that are being performed that are no longer needed. Next, we should look for less expensive answers to the tasks that the city currently performs. If tasks can be privatized and outsourced, we should look seriously at doing that.
The failure of Detroit should be a wakeup call to every city. We are in Houston, and this should come as a wakeup call to us. While Snyder addressed where we are as a country, this is our chance to take care of things at home. We must begin now. We must stop kicking the can down the road and assuming that a later generation will handle the responsibility for us at a later date. It might be too late at that point.