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July 14, 2019 - Freedomain Radio - Stefan Molyneux
39:04
The Truth About Detroit's Bankruptcy
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The
End The End
The End THE END Hi everybody, it's Stefan Moller from Freedom Aid Radio.
Hope you're doing well. Let's go to Motor City and try and figure out why the Thelma and Louise basket case known as Detroit is currently sailing off the fiscal cliff.
This is the truth about Detroit's bankruptcy.
Ooh, let's look at the crater, the smoking crater known as Detroit's finances.
So estimated $18 to $20 billion in debt and unfunded liabilities.
That's about $25,000 to $28,500 for every man, woman, and child in Detroit, or about 18 times to 20 times the existing budget.
It's almost $3 billion in general government debt, $5.9 billion in Detroit water and sewage department debt, 3.5 billion in unfunded pension liabilities, 5.7 billion in unfunded retiree healthcare liabilities, and they owe money to more than 100,000 creditors.
Recently offered about 10 cents on the dollar, but was not allowed to.
Over 23,500 city retirees are presently in danger of losing their benefits, and bondholders may be left with only pennies.
On the dollar. The majority of Detroit's debt is accounted for by public sector salaries and pensions.
38% of the city's present budget is being spent on legacy costs, such as pensions and debt services.
So, it's not really providing services to existing city residents, but rather pensions to retired.
This is a common factor, and we're going to talk about this at the end of the presentation.
This is monstrous and everywhere.
Just look at CalPERS in California, it's the same kind of deal.
Politicians don't want public sector workers going on strike, and so instead of offering them raises in the here and now, which would require that they borrow, pay taxes, or I guess they don't have the individual ability to print money Like the monopoly generating type whatever you want into your bank account federal reserve.
So instead of offering them raises in the here and now, which they'd have to fund, they offer them very generous health and pension retirement benefits way down the road, 20, 30 years down the road.
Hey, look, we're not even going to be in office anymore.
Let's promise them whatever we want, whatever they want 30 years down the road.
And this is all coming home to roost now, which is really quite tragic.
What has happened to the population?
Well, it's been a kind of slow disintegrating neutron bomb in Detroit.
The decline of the car industry, evaporation of manufacturing jobs, high tax rates, deplorable public schools and increasing crime rates have led to many families moving away.
Families of a particular race, which we will talk about in a sec.
Did you know at one point Detroit was the fourth largest city, and with Motown about the third loudest, in the United States?
But over the course of the last 60 years, the population has decreased by about 61%.
Really quite astounding.
So almost 2 million people in 1950, down to 700,000 today, of which about nine are working.
So since just the year 2000, over the last 13 years, the population has fallen by 28%.
A fraction of Detroit's revenues, the graph here, are going to debt.
Pensions and retiree health care goes from 30% up to 27.
2017 is estimated to about 65% of the revenues going to people who aren't even working or providing services anymore.
Completely unsustainable and is going to collapse the American economy.
Detroit population, ah, the slide to nowhere.
From 1.8 million and change in 1950, 700,000 now, or as of 2012.
So, it recently filed for Chapter 9 bankruptcy protection in federal court.
That has been denied.
It is becoming the largest bankruptcy in the history of the United States, certainly the largest public sector bankruptcy.
Municipal bankruptcy is fairly infrequent compared to the 1.2 million personal and business bankruptcies filed in 2012.
So, including Detroit, there have only been 36 bankruptcies since 2010.
Before that, pretty rare.
And no municipal bankruptcy has ever resulted in involuntary cuts to retiree benefits.
Now, I don't know if you knew this, when a private company goes bankrupt, there is a government program called the Pension Benefit Guarantee Corporation.
It intervenes and provides a minimal level of benefits to anyone who's lost some of their retirement benefits.
But it doesn't back public sector pensions.
So there have been a few such Chapter 9 cases since the Bankruptcy Act was amended in 1934 to include municipalities, but there's not a lot of precedent.
And because there's so many creditors in Detroit, it's going to be quite a complicated technical wrangle Going ahead.
On the plus side, at least we have a legal system which incentivizes lawyers to minimize expenses and time-consume.
No, wait. Sorry.
Optifit land got me again.
Now, this is a domino.
This is going to be the first of many big bankruptcies.
Chicago's in a similar situation.
Unfunded pension liabilities are the storm clouds gathering that are going to strike dead the economic productivity of all major cities in the West.
And eventually, it's going to wind its way up the court.
Supreme Court's likely to be involved in how to deal with this kind of stuff.
Now, there's a legal and judicial battle underway attempting to block the bankruptcy from proceeding.
Right now, that has succeeded. It's the retirees who don't want this bankruptcy to proceed because they don't want to not get paid their retirement benefits.
So, I mean, the legality is, I guess, vaguely interesting for those of you who like those Gordian knots of interfering lawyer sharks, but...
The reality is no amount of lawyers can change the fundamental mathematics that Detroit is insolvent.
No amount of circling lawyers hurling briefs at each other is going to change mathematics.
Now, when a company goes bankrupt in Chapter 11, it gets restructured, right?
The board gets fired usually.
People move in and the whole company gets restructured.
But in Chapter 9, this doesn't happen.
So, you can wipe out some debt, but the underlying issues of corruption and mismanagement and shrinking population and unfunded liabilities are going to remain.
So, just something to notice.
So, let's look at the employment situation.
Oh, my Lord. 1950 to 2011, Of course, the population has shrunk completely.
What has really happened is there were about almost 300,000 manufacturing jobs in Detroit.
Ask your grandparents.
You used to make a lot of cars there.
Now there are less than 27,000.
Is it the $1,500 per car that is required to pay off the union thugs?
I don't know. But is it increased health and safety regulations, environmental regulations, which are kind of misnamed?
Just a bunch of government controlling bureaucrats strangling all entrepreneurs and productivity in the economy.
Did you know that if regulations, federal regulations, had remained the same, and it wasn't like the economy was unregulated in 1949, If federal regulations had remained the same, America would be many times richer now.
Instead of having a GDP of $15 trillion a year, it would be about $53 trillion a year.
Isn't that astounding? You know, with three to four times the amount of wealth, would you not be able to solve pretty much all environmental and poverty-related problems?
Of course we would! But we handed our power over to the government and look what happened.
So even between December 2000 and December 2010, 48% of the manufacturing jobs in the state of Michigan were lost.
The unemployment rate, while down from a peak of 27.8% in the summer of 2009 when General Motors and the Chrysler Group were going through their own bankruptcies, it's still at 16.3%, nearly twice Michigan's statewide average.
So the unemployment rate has gone down, but is that just because people are leaving?
It's like, I bet you there were far fewer rats on the Titanic just before it went down, but that doesn't mean that they'd solved their rat problem.
So employment in Detroit, as you can see, just collapsing down from 2000 to 2013.
Unemployment rates way up and then down slightly, of course, partly because of the Fed's endless bloating stimulus blood-burning package of fiat currency injections into the economy.
Oh, catastrophic. In 1960, the city of Detroit had the highest per capita income in the entire nation.
And not a lot of people know this.
In the post-war period in America, in a mere 14 years, the poverty rate was cut in half.
And then the welfare state came in and the decline stopped.
We have solved problems of poverty, or at least involuntary poverty.
It could have been solved generations ago.
But again, we turned our power over to the state and look what happened.
The average per capita income in the U.S. currently is $42,693.
In Michigan, $37,497.
In Detroit, $15,261.
What a slow multi-generational rot has occurred there.
Nationwide poverty rate for the U.S. is 12.6%, pretty much exactly where it was when the welfare programs came in in the 1960s.
In Michigan, it's 12%.
Citywide poverty rate of Detroit, 36.16%.
Shocking, astounding, catastrophic.
In Detroit, over 116,000 children live in poverty.
This represents 60% of Detroit's total child population.
27% of the city's total pop.
It's a 64% increase, 64.7 to be precise, increase in child poverty within the city since 1999.
Just horrendous.
Ah, with catastrophic economies come catastrophically high taxes, almost inevitably.
Detroit charges twice as much tax per capita as its neighbor cities.
Its tax rates... The same thing that happened with the late Roman Empire.
They could only tax in cities, drove all the young people out of cities, which meant there were fewer young people, particularly, of course, young men to conscript into the military, which meant they had to pay for mercenaries to maintain the empire, which meant they had to raise taxes even more in the cities, just driving more people, meaning they had to hire more mercenaries.
Eventually, they couldn't pay their mercenaries.
Their mercenaries came and sacked Rome, and it depopulated from over a million to about 19,000 within less than a generation, and we had a thousand years of the Dark Ages.
Yay! Something to look forward to.
These high taxes don't generate even close enough revenue to cover the city's bills.
Detroit has accumulated $700 million in deficits over the last seven years.
They cover it by borrowing.
The annual revenues are about $1.1 billion.
Of course, it spends almost 40% of its revenue on servicing those liabilities, which is paying interest on the debt.
By 2017, this will be 65%, and of course, it spends a massive percentage of its income paying people who aren't working anymore.
So, not really much left for things like, you know, running lights, filling potholes, or sending emergency services out in less than an hour.
Property taxes have plummeted in Detroit.
The funds now comprise 13% of general fund revenues compared to 48% to 77% in other cities.
Money from the state and federal government normally makes up the remainder in most cities.
Of course, the state and federal governments have no money!
I love it when they say that the government is paying something.
Nope, nope, nope, nope, nope, nope.
The government is stealing from other people, usually the unborn in the form of debt, usually from the poor in terms of the inflation caused by fiat currency printing or in raising taxes.
They have no money. Government has no money.
Government is a revolving door of guns and butter.
Detroit has the highest property taxes among big cities nationwide and relies on assessments that are seriously inflated.
Many homes are presently assessed at more than 10 times their current market value.
I was reading about a guy. His house is actually worth about $35,000.
He paid over $5,000 in property taxes because the city rated it so high.
Shrinking group and neighborhoods are relied upon to pay the bulk of the bills.
General Motors, DTE Energy, Chrysler Group, Marathon Petroleum, and three local casinos paid almost 20% of all collected property taxes.
Now, let's say you're in Detroit and you say, hey, property tax assessment, way too high, my house isn't worth that much at all.
Well, you can come and ask them to reassess it.
And we'll get into why that's such a challenge in a moment.
Nearly half of Detroit's 305,000 properties just didn't pay their property taxes.
Oh, what a shame! And over 30% are also delinquent on their 2011 bills.
Of course, the people in the houses say, wait a minute, I'm not getting any services.
The schools are crap, the lights are broken, potholes, no emergency services, the firefighters don't come or can't even use their ladders, so why should I pay my bills?
An estimated $131 million in property taxes and fees have gone uncollected, 12% of Detroit's general budget.
I mean, that's not going to put much of a dent in $18 to $20 billion worth of debt, but it's worth mentioning.
77 blocks had only one owner who paid taxes last year.
Detroit's delinquencies in taxes are so common, many owners have been permitted to keep their property even without paying taxes.
Because it's even worse, if they flee, then the city has to take over the properties and all of the associated liabilities.
They ignored about 40,000 delinquent properties last year and went overlooking an estimated 36,000 this year.
And one of the ways that you can escape your property tax bill is to abandon your property and then buy it back from the city.
600 properties in 2012 were repurchased by their owners, triple the number in 2010.
It costs approximately 6 million in unpaid taxes, assuming that they ever would pay.
But a guy who owed $35,000 on his house sold it and then bought it back from the city for $5,000.
Not a bad deal. So if you want to get a reassessment of your property because it's valued too high, you can...
The Detroit department that assesses properties is also under heavy criticism for waste and corruption.
Its two top offices work only two days a week and each makes more than $100,000 for a year.
Ah, the Pac-Man that eats the future.
Detroit property taxes, human pay, 2011.
68% collected and almost 32%.
Delinquent. I mean, it's a little hard for a city that doesn't pay its bills to demand that you pay your bills, right?
Education. Oh, my Lord.
This is one of the reasons why it's become such a smoking crater, is that it's really hard to lure businesses to a city where half the population is functionally illiterate.
So the annual nationwide teacher salary is $56,000 and change.
Michigan teacher salary is $63,000.
Ah, in Detroit, the average teacher salary is $71,000 and change.
Nationwide, America spends, or rather taxpayers and the future children sold off to the international banksters pay $10,469 per student each year.
In Michigan, it's $12,500 and change.
In Detroit, total educational expenditures per student, $14,659.
Now, for those of you who understand how the government works, Does more spending result in higher quality, or does more spending result in lower quality?
If you guessed the first, please go back and study your libertarian economics.
Whenever the government spends more, you get lower quality.
Detroit spends 40% more per student in educational expenditures each year and pays teachers 26% more than the nationwide average.
What are the results?
Let's see. Only 7% of the 8th grade students are grade level proficient or better in reading.
If that wasn't bad enough, only 4% scored highly enough to be rated proficient or better in math.
It is at least some consolation that those who are on the City Council running the budget are actually 0% proficient in math based upon what they've been doing for the last, say, 50 or 60 years.
In 2009, Detroit Public Schools posted the worst scores on record in the test of students in large central U.S. cities.
In 2012, the nationwide high school graduation rate was 78%.
Detroit's high school graduation rate was 65%.
But at least they were graduating with between 3% and 7% proficiency in math and English.
In 2012, the nationwide dropout rate was 3.4%.
Detroit's high school dropout rate was 19%.
Secretary of Education Arne Duncan has referred to Detroit as ground zero for education in this country.
It's not quite true.
It's the day after tomorrow for education in America.
According to Detroit Regional Workforce Fund, an astounding 47% of the residents of the city of Detroit are functionally illiterate.
In other words, they're listening to what I'm saying, not understanding much of it, but really can't read it.
What does functionally illiterate mean?
Well, it means you can't fill out basic forms like a job application.
You can't read prescription labels, what's on the bottle, how many you should take, and so on.
On the plus side, at least the ratings for American Idol are declining.
Ah, property crimes.
How much fun is it to live in Detroit?
Let's find out. So, your chances of becoming a victim of a property crime are as follows.
Nationwide, 1 in 34.
New York City, 1 in 44.
Detroit, 1 in 16.
They're number one. Your chances of getting your vehicle stolen are as follows.
Nationwide, 1 in 436.
New York City, 1 in 613.
Detroit, 1 in 62.
So, in about 50 years, they've gone from making cars to fundamentally taking cars.
That's the new economy of Detroit.
Violent crime rates in Detroit, New York City, and nationwide.
These are things like forced rape, murder.
I don't know why forced rape, forcible is rape.
Murder and non-negligent manslaughter, armed robbery, and aggravated assault, including assault with a deadly weapon such as a public school.
Your chances of becoming a victim of violent crime are as follows nationwide, 1 in 259.
New York City, 1 in 126.
Detroit, 1 in 46.
Your chances of becoming a victim of a violent or property crime are nationwide, 1 in 30.
New York City, 1 in 33.
Detroit, 1 in 12.
Violent crimes per 1,000 residents, Detroit, Cleveland, Pittsburgh, St.
Louis, Milwaukee.
Yay! They have the tallest column of hell!
Average crime rate nationwide is 33 per 1,000 residents, not counting voting.
New York City has a crime rate of 31 per 1,000 residents.
Detroit has a crime rate of 84 per 1,000 residents.
One of the highest crime rates in America compared to all communities of all sizes.
In 2007, I don't think there were a lot of fireworks for this, Detroit was named the most dangerous city in the country by the Morgan Quitner Report.
Detroit has consistently been listed among the most violent cities in the United States since 1985.
In 2012, Detroit had 411 murders, breaking the tourist-friendly one-per-day metric, a 9% increase from the previous year.
The city had 377 murders in 2011, 327 in 2010.
The murder rate is at a 40-year high.
It is 11 times higher than that of New York City.
Annual increases in homicides combined with a shrinking population have made Detroit competitive with New Orleans for the highest murder rate in the nation, with the one caveat that in Detroit you're much less likely to be either murdered by voodoo or clubbed to death with a jazz trumpet.
The city has faced many cases of arson each year on Devil's Night.
The evening before Halloween in 2009, the Detroit Fire Department reported 119 fires, of which 91 were classified as suspected arson just on this little time period.
The size of the police force in Detroit has been cut by about 40% over the past decade.
When you call the police in Detroit, it takes them an average of 58 minutes to respond, compared to a nationwide average of 11 minutes.
Most police stations in Detroit are now closed to the public for 16 hours a day.
So during the off-hours, residents wanting to report crimes cannot speak face-to-face with an officer.
Instead, they must call or go online to make reports.
Something like you go to the website and you type, Dear Officer, there's someone in my house.
If you have a webcam, that makes it even more dramatic.
The Detroit Police Officers Association is warning citizens and out-of-towners that they enter Detroit at their own risk, saying they are grossly understaffed and unable to adequately protect the public.
Today, police solve less than 10% of the crimes that are committed in Detroit.
And it's even lower when it comes to the majority of crimes committed in Detroit, which is by the city council.
Case clearance rates, Detroit, Cleveland, Pittsburgh, St.
Louis, Milwaukee. They have the lowest bars of hell in this particular situation.
So, total functioning streetlights.
You can pause these if you want to read the numbers.
40% of the city's streetlights don't work, cloaking the city in darkness and further enabling crime.
One-third of Detroit's 140 square miles is either vacant or derelict since 2008.
Detroit has closed 210 of its 317 public parks.
Private donations allowed the city to delay the planned closure of another 50 this year.
This winter, the city often just had 10 to 14 out of 36 ambulances in service.
Some have over a quarter million miles on them.
In March, a group of corporate donors gave $8 million so the city could buy some more ambulances.
In February, Detroit's fire commissioners told firefighters not to use hydraulic ladders except if there is an immediate threat to life because they hadn't been inspected in years.
So if you're in a high building, like if you're high up in a building, please don't smoke.
Now, we have to talk about the racial divide because this is one of the most significant aspects of the demographic change over the past 50 or 60 years in Detroit.
Now, of course, in the late 1960s, there were a lot of racial tensions in the U.S., all completely soft, as we can see from the recent Zimmerman case.
So in Detroit in the summer of 1967, about the worst race riot the country had ever seen.
One of the most violent urban revolts of the 20th century, and lots of factors, of course, political, economic, and social factors, growing police abuse, economic inequality, black militancy, lack of affordable housing, urban renewal projects, and so on, rapid demographic change.
Mayor Coleman Young, Detroit's first black mayor, wrote, though, the heaviest casualty was the city itself.
So what happened on July 22, 1967, the Detroit police raided an unlicensed bar in the center of the city's oldest and poorest black neighborhood?
At the time of the raid, a party celebrating the return of two black servicemen from Vietnam was in progress.
82 people attending the party were arrested.
During the raid, an estimated crowd of 200 people gathered outside the bar in the belief that excessive force had been used by the predominantly white police force.
It started with a bottle thrown at a police car, ended with 43 people dead, almost 1,200 injured, and over 7,200 arrests.
Approximately 2,500 stores were looted and the total property damage was estimated at $32 million.
Back then, $32 million was real money.
Because, you know, when you're being oppressed by the man, the best way to solve it is with a free TV. Until the April 1968 riots following the death of Dr.
Martin Luther King, the Detroit race riot stood as the largest urban uprising of the 1960s.
So prior to the riots, Detroit had seen what had come to be known, or what's now known as white flight, or the mass movement of whites, especially middle-class whites from neighborhoods undergoing racial integration.
During the 1950s, the white population of Detroit declined by 23%.
Correspondingly, the percentage of non-whites rose from 16.1% to 29.1%.
In sheer numbers, the black population of Detroit increased from 303,000 to 487,000 during that decade.
By 1967, the black population of Detroit stood at an estimated 40% of the total population.
And some of the neighborhoods were more affected by white flight than others.
The 12th Street neighborhood where rioting began in 1967.
In this neighborhood, in 1940, the area was almost completely white, 98.7%.
By 1950, the area was white.
37.2% non-white by 1960.
Only 3.8% of the area's residents were white.
So almost a complete reversal in just 20 years.
I mean, that's really, really quite astounding.
So, sorry, little more than a decade.
The first blacks had not moved to the area until 1947, 1948.
Little more than a decade, it went from almost completely white to almost completely non-white or almost completely black.
Let's look at some of these numbers.
So, The darks represent the minorities, and the dark colors here, and the whites represent the whites.
So this is 1950.
You can see here 1960, 1980, 1970 is missing, and 1990 and 2000.
So that's really quite an astonishing increase.
This is 2010. And this is not unimportant, right?
I mean, blacks are predominantly...
More likely to be represented on the welfare roll, so they're more expensive for a city, right?
So, you know, 3%, 4%, 5% of whites are on welfare, 26%, 27%, 28% of blacks are on welfare, so much more expensive.
Blacks generally, for a variety of reasons, have a lower income and therefore pay fewer taxes.
Blacks are, you know, black youths in particular are 10 times more likely to commit a violent crime than whites and Hispanic youths combined, therefore more expensive to patrol, to police, and so on.
So, it's a big challenge for a city to survive with this sort of situation.
Fundamentally, understand, it's not a black issue.
It's a socialism issue.
Socialism doesn't work. That the Detroit City Council spent on these ridiculous boondoggles trying to stimulate economy, the amount of tax breaks they gave to people who ended up taking money from the city but never actually developing any businesses.
It's just socialism. I mean, there weren't a lot of blacks in the Soviet Union.
And that collapsed because communism doesn't work.
Extreme socialism doesn't work.
So socialism fundamentally doesn't work.
It is, of course, primarily a Democratic Party in state, local, and national elections.
According to a study released in the Bay Area City for voting research, Detroit is the most liberal large city in America, measuring only the percentage of city residents who voted for the Democratic Party.
A Democratic Party, the history of a pretty racist party, for some reason, gets the allegiance of blacks.
Beginning with its incorporation in 1802, Detroit has had a total of 74 mayors.
Last mayor from the Republican Party was Louis Miriani, who served from 1957 to 1962.
So Detroit elected its first black mayor, Coleman Young, in 1973.
He had a 20-year term as Detroit's mayor.
Tenure remains pretty controversial.
He is credited with integrating the municipal workforce and reforming the police departments, but its administration oversaw a large number of scandals.
And he is frequently accused of having stoached the fires of racial divide for his own political gain again.
Thank goodness that doesn't happen anymore.
So Mayor Coleman Young's ally, William L. Hart, served for 15 years as Detroit police chief before being indicted and convicted for stealing $1.3 million in undercover police funds, sentenced to 10 years' imprisonment in order to pay back the money.
Deputy Chief of Police Kenneth Weiner, no relationship to the Don't Tweet Your Meat Weiner in New York, Also, a close associate of Young was charged and convicted in a separate case involving investment fraud and stealing $1.3 million from the same fund.
Charles Beckham, the city worker and sewage director, was convicted in 1984 of taking a bribe for a sludge handling contract.
It is heavily speculated that he took the fall from Mayor Young, who had also been named in association with the investigation.
Young's third term was marred by two federal investigations that grew out of his efforts to direct city businesses to black-owned companies.
He underwent six federal investigations throughout his tenure, but he was never charged with a crime, to be fair.
All right, so let's talk about the big picture here.
Detroit is a foreshadow.
It is the day after tomorrow for U.S. cities and U.S. economy as a whole.
Municipalities are increasingly confronted with how to pay for promised pensions and legacy costs.
The Pew Center for the States in Washington estimated states' public pension plans across the U.S. are underfunded by a whopping $1.4 trillion, or were in 2010.
I mean, that's almost 10% of the entire U.S. economy.
Chicago recently had its credit rating downgraded because of a $19 billion unfunded pension liability that the rating service Moody's puts closer to $36 billion.
Detroit, $18 to $20 billion in debt.
Chicago has almost twice that just in unfunded pension liability.
So this is promises made to pensioners that The governments have not put money aside for.
And the governments, of course, they estimate, oh, we're going to get 6%, 7%, 8% return on investment, which means they have to put less money aside.
That would actually be illegal for a private sector pension.
You couldn't guess that much. And since the recent financial collapse starting in 2008, you can't possibly get even closer that much.
So it's even worse. Cincinnati's general obligation bonds were also recently downgraded, citing budgetary pressure from pension contributions.
In Baltimore, budget shortfalls are expected to run $745 million over 10 years, largely because of the growth in pension costs.
The Pew Center recently released a survey showing that 61 of the nation's largest cities had a gap of more than $217 billion in unfunded pension and healthcare liabilities.
It's hard to imagine anything but massive cuts in the future for these unfunded liabilities.
The financial resources are simply not there, but still we dream That somehow math is not anew slowly tightening around our future.
So the massive pressure that public pensions are putting on municipal budgets, any move to ease these liabilities, especially through bankruptcy, is being watched very carefully by state and municipal officials, union leaders, retirees, and bond traders.
Taxes can always be raised and services can always be cut, thus bankruptcy may loom as the only choice left for struggling municipalities.
So here's some pensions and the unfunded aspect of these.
This is as fiscal year 2009.
I'm not going to read all these off.
You can pause if you want. But as you can see, the funding levels are significantly low.
Except in Washington, D.C. Shockingly, the belly of the beast, the heart of the monster, has funding levels of 104%.
Retiree healthcare, how much is that funded?
Well, the lower the lines, the worse things are.
Even in Washington, D.C., the funding level is only 49%.
So hit the treadmill, old people.
There's not going to be much there for you.
Is there going to be a bailout?
Well, Obama promised this in the past.
It's less likely to happen. And it's been a long line of bailouts, of course, for Detroit.
So in the last five years, under the veil of quantitative easing, Which is really the diarrhea of fiat currency.
One, two, and three, hundreds of billions of dollars have been given to banks and other financial institutions that were deemed too big to fail.
Is Detroit, with its population of 700,000, also too big to fail?
Well, quantitative easing is being used to inject $85 billion per month into the US economy, which is the only reason it hasn't collapsed yet.
That works out to $20 billion per week.
So Detroit's got a total debt of $80 to $20 billion.
Will the federal government simply give Detroit one week's worth of QE and let them escape bankruptcy?
It won't solve the problems, doesn't increase the literacy of the population, doesn't change the general issues of corruption and overspending.
You know, if you give, if people have financial problems and you give them money, it only makes things worse in the long run.
It's like if you go to some addicted gambler, some compulsive gambler, You know, who's run up a $20,000 debt and then you pay off his debt.
What's he going to do? He's going to go, woohoo, let's start gambling even more.
It's tragic but true. When talking about the GM and Chrysler bailouts of 08-09, President Obama did say that he refused to let Detroit go bankrupt.
Oh, what a megalomaniac.
I mean, do you even say that I refuse to let Detroit?
Oh, well, send them a check, President Obama, with your own money.
If you want to know what the future of the U.S. is going to look like, this is one of the reasons why we're looking at the city of Detroit.
It's not just the U.S., it's all over the West.
Look at the real numbers. According to official numbers, which means lies rubber-stamped by the authority of the state, the U.S. national debt is close to 17 trillion dollars.
The U.S. population is 310 million.
So, $53,000 of debt for every man, woman and child in the United States.
That figure is an estimated $30,000 higher per person than that of Detroit.
If Detroit's debt of $25,700 to $28,500 was enough to put Detroit into bankruptcy, is the national debt of $53,000 per person enough to put the U.S. into bankruptcy?
That being said, There is, to put it as nicely as possible, substantial doubt as to whether the true size of the national debt in the U.S. is only 17 trillion.
John Williams, no relationship to the composer, at shadowstats.com calculated that the real national debt is actually an estimated 85 trillion dollars.
I'm actually, I shaved my head so that I could start to talk about these numbers with my little finger in my mouth.
If John Williams' estimate is to be divided by the 310 million population of the U.S., $275,000 of debt for every man, woman, and child in the United States.
That figure is an estimated 10 times higher per person debt than that of Detroit.
Is that enough? Could nationwide debt that is proportionally 10 times higher than Detroit's cause a national bankruptcy?
Of course it will. It's inevitable.
To make things even worse, the Congressional Budget Office has calculated that when including present unfunded liabilities.
So these are promises that the government has made that they don't have enough money to pay for in the future.
The national debt is about $202 trillion.
Mad. And that's about $650,000 for every man, woman and child in the United States.
So if you count those people who are on welfare, those people who are retired, those people who aren't working, those people who are children, those people who are in school, those people who've given up looking for work, those people who are unemployed, I think in the U.S. it's you and you, and that's about it.
You two are totally going to get it in the shorts.
I mean, you could certainly argue the U.S. is in an economically better state than Detroit, but is it 25 times?
And, you know, while Republicans claim to be against this kind of stimulus spending, they're entirely for it when it comes to the military-industrial complex stimulus spending.
Republicans love to spend money on the military and then claim that it's not welfare for the rich, which of course it is.
Welfare for the rich plus evil is the military-industrial complex.
But that's counted as economic activity.
You know, stealing money from people in order to spend money on blowing shit up overseas and sometimes domestically is considered to be economic activity that is productive.
Because we live in the matrix of the state where up is down and black is white.
Can a national bankruptcy possibly be avoided?
Well, of course, what's going to happen most likely, as I predicted for many years, is that the government is going to turn on the dependent classes, both the rich and the poor, and suddenly demonize them and use that reprogramming of the national delusions called a national dialogue to say that now we have to all pull together and we have to get our verbats and we have to start working and They're just going to start cutting benefits while demonizing the rich and poor who depend on those benefits.
So where are we going?
Well, of course, we are going into a financial hole, just like all empires beforehand, just like as statism grows.
It's important to remember, of course, that America started as an experiment in the very smallest, tiniest government that could be imagined, and it has now grown into the very largest, most powerful, and most destructive government that the world has.
has ever seen with the capacity to destroy human and all life, in fact, on the planet many times over.
This is quite instructive.
Small governments generate economic growth.
The economic growth is then used as collateral by those governments to borrow and bribe the population in return for votes while deferring the cost of that bribery to future generations who really get it in the shorts.
So whenever you have a government, the fuel of the free market creates a sort of delayed fuse supernova status explosion in the future And this is why I would invite you to imagine, just picture, just come with me on a journey, journey, journey.
Just imagine a possibility of running a society without a state.
Then we don't have to worry about economic growth being used to fuel inevitable fascism down the road.
We don't have to worry about our freedoms being used as nooses slipping around the necks of the unborn.
I know it sounds crazy.
Of course it sounds. Oh, we've always had governments.
Ah, so what? Who cares?
We always had slavery until we didn't, right?
We always had Feudalism until we didn't.
And so it's not inevitable that these prehistoric monstrous hierarchies that really come out of the primitive infancy of our species need to direct the complex economic lives of billions of people around the world.
It's possible. It's possible.
You know, if things were better when the government was smaller, let's just keep going until it's gone.
I mean, you don't want to reduce cancer, particularly when reducing it makes it grow back faster later.
Just get rid of it completely.
This is Stefan Molyne from Free Domain Radio.
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