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Detroit’s decades-long decline has accelerated of late. Over the last four years, the city has lost over a fifth of its population, and its manufacturing base has continued to erode. What was the city’s response to this? It shifted city resources from the private sector to the public sector, raised taxes, and increased regulations.
And last week, Detroit became the biggest American city to file for Chapter 9 bankruptcy. The Heritage Foundation’s Alison Acosta Fraser and Rachel Greszler point out:
Detroit’s tragic downward cycle has reached its end. With all tax rates close to their statutory max and dismal public services that discourage individuals and businesses from remaining in or coming to Detroit, the city simply cannot continue to fund its operations and service its debt.
Detroit will undoubtedly seek help from the federal government. This must be resisted, Fraser and Greszler argue: Continue Reading »