Detroit Counterpoint

Two solutions for the Detroit problem; the current plan is to litigate the right to dismember the dead horse. Unfortunately when the butchers are done there will be little meat left on the bones.

Consider for a moment the costs of multiple teams of attorneys billing hundreds of hours of time on cases that could stretch on for years. Millions of dollars will be spent on claims that are already visibly fruitless, as the pool of money available to be divvied up amongst the claimants will be shrinking as legal fees soar and those who might have once considered doing business in the bankrupt city/county decide to pass until the bankruptcy bonfire burns itself out.

We already know the demands of all the claimants: raise taxes on whomever and whatever still generates a taxable income in the bankrupt city/county. Do the claimants think about the incentives and disincentives their demands create? Of course not; they are focused on their sense of entitlement and “what’s owed to me.”

So anyone with any prospect of earning more income elsewhere decamps from the bankrupt city/county to elsewhere. This further shrinks the tax base and bleeds the most productive (or potentially productive) enterprises and people from the city, leaving less income and vitality for those who choose to remain in the bankrupt community.

Higher taxes and fewer services creates a self-reinforcing feedback loop where those who leave first are better off than those who leave second, and so on.

An alternative is to attempt to revivify it.

The decades’ growing tragedy of a now bankrupt Detroit provides a unique opportunity to test our fundamental principles. What if Detroit became a free city in which government provided for public safety, honest courts, protection of property rights, and little else? Might not unabated free enterprise take hold as it always has in America?

I think we can all imagine the surge in activity that would follow those steps, but it won’t happen because the idea of a successful libertarian enclave strikes terror into the hearts of parasitic bureaucrats. It is clear that government in the US now realizes that it is seen as an occupying force and consequently police strategy has changed from maintaining civil order to protecting government at all costs, intimidating the citizenry by using tactics such as random stop-and-search, no-knock raids, overwhelming force in the most trivial of situations, complete with military arms and armor. The NSA scandal shows that the primary goal of anti-terrorism in the US is now to prevent any challenges to the legitimacy of government and the political class, with any benefits to civilian safety a mere happy coincidence.

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