Hi, everybody. It’s Stefan Molyneux from Freedomain
Radio. I hope you’re doing well. Let’s get to Motor City and try and figure out why the
Thelma & 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. 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 in unfunded retiree health care 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 accountable
for by public sector salaries and pensions. Thirty-eight percent of the city’s present
budget is being spent on legacy costs such as pensions and debt services. 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 or pay taxes — so 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 and whatever they want 30 years down the road.
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 two million people in 1950 down to 700,000 today of which about
nine are working. So it seems just the year 2000 over the last 13 years, the population
has fallen by 28%. A fraction of Detroit’s revenues, a graph
here, is going to debt. Pensions and retiree healthcare goes from 30% up to 2017 is the
estimated to about 65% of the revenues are going to people who aren’t even working or
providing services anymore. Completely unsustainable and it’s going to collapse the American economy. Detroit population, this slide to know where,
from 1.8 million in change in 1950, 700,000 now or it’s 2012. 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 and the largest public sector bankruptcy. I mean, this simple bankruptcy is fairly and
frequent compared to the $1.2 million personal and business bankruptcies filed in 2012 including
Detroit’s, there would have been 36 bankruptcies this 2010. Before that, pretty rare. No municipal bankruptcy has ever resulted
in involuntary cuts to retiree benefits. Now, I don’t know if you knew this one; if 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 they met 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 are 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 incentivize lawyers to minimize expenses and time consumed — no, wait. Sorry.
Opposite land got me again. Now, this is a domino. This is going to be
the first of many big bankruptcies. Chicago is 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. Eventually, it’s going to wind its way up
the courts. Supreme Court is likely to be involved in how to deal with this kind of
stuff. Now, there’s a legal and traditional battle
underway attempting to block 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 of you who like those Gordian knots into feeding
lawyer sharks, but the reality is no amount of lawyers can change the fundamental mathematics
that Detroit is insolvent. No amount of secular lawyers hurling briefs at each other is going
to change mathematics. Now, when a company goes bankrupt, in Chapter
11 it gets restructured. 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. 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. They
used to make a lot of cars there. Now, there are less than 27,000. Is it the $1500 per car that is required to
pay off the union thugs? I don’t know. Is it increased to health and safety regulations,
environmental regulations, which are kind of misnamed, just a bunch of government control
and bureaucrats strangling all entrepreneurs and productivity of the economy? Did you know that if regulations, federal
regulations had remained the same, which — and it wasn’t like the economy was unregulated
in 1949 — if federal regulations have 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? With three to four times the amount of wealth,
would you not be able to solve pretty much all the environmental and poverty-related
problems? Of course, we would but we handed that 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 went down from a peak
of 27.8% in December of 2009 when General Motors and the Chrysler Group were going through
their won bankruptcies. It’s still at 16.3%, nearly twice Michigan statewide average. The unemployment rate has gone down, but is
that just because people are leaving? It’s like I bet you they were a far fewer rats
on the Titanic just before it went down, but that doesn’t mean that they’d solve their
rat problem. So employment in Detroit, as you can see,
is just collapsing down from 2000 to 2013. Unemployment rate 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. 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.
Then the Welfare State came in and the decline stopped. We have solved problems of poverty
or at least voluntary 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 US currently
is $42,693. In Michigan, $37,497. In Detroit, $15,261. What a slow multigenerational rut
has occurred there. Nationwide poverty rate for the US 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 job population. About 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 charged as twice as much tax per capita. Its neighbor
cities’ tax rates are at or near state maximums. This just encourages, of course, more people
to leave. It’s 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 they 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 and the city’s just driving more people, meaning they had to hire more
mercenaries. Virtually, they couldn’t pay the 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 1000 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 for 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 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 their 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. No, no,
no, no, no, no. 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. The government has no
money. The 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 more than ten times their current market values. 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 groups of 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. 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 that much of a dent in $18 to $20 billion worth of debt, but it’s worth mentioning.
Seventy-seven 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
overlooking an estimated 36,000 this year. One of the ways that you could escape your
property tax bill is to abandon your property and then buy it back from the city. Six hundred
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 officers
work only two days a week and each makes more than $100,000 per year. Ah, the Pacman that eats the future. Detroit
property taxes due and paid 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’s
salary is 56,000 in change, Michigan teacher’s salary is 63,000. Ah, in Detroit, the average
teacher’s salary is $71,000 in change. Nationwide, America spends or rather taxpayers
in the future, children sold off to the international banksters, pay $10,469 per student each year.
In Michigan it’s $12,500 in 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? Dum, dum, dum,
let’s see. Only 7% of the eighth 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 US 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 a 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 property crime are
as follows: nationwide, one in 34; New York City, one in 44; Detroit, one in 16, they’re
number one. Your chances of getting your vehicle stolen are as follows: nationwide, one in
436; New York City, one in 613; Detroit, one 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
assaults including assault with a deadly weapon such as a public school. Your chances of becoming a victim of violent
crime are as follows: nationwide, one in 259; New York City, one in 126; Detroit, one in
46. Your chances of becoming a victim of a violent or property crime are: nationwide,
one in 30; New York City, one in 33; Detroit, one in 12. Violent crimes per 1,000 residents in 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 Quitno 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 not 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 and ahhh!” 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 risks, saying they
are grossly understaffed and unable to adequately protect the public. Today, police solved less
than 10% of the crimes that are committed in Detroit. 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. Total functioning streetlights — you can
pause this 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 ten to
14 out of 36 ambulances in service. Some have over a quarter million miles in 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 US, all completely solved, as we can see from the recent Zimmerman case. In Detroit, in summer of 1967, about the worst
race riot the country had ever seen, one of the most violent open 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. Eighty-two 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’s not about the bottle thrown to the police
car. It 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 estimate to $32 million. Back then,
$32 million was real money. Because 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 raised riots stood as the largest 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%. Sheer numbers of 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. Some of the neighborhoods were 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 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. Sorry
— a little more than a decade. The first blacks did not move to the area
until 1947, 1948. A 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. The dots
represent minorities and the dark colors here and the white represent the whites. So this
is 1950. You could see here 1960, 1980, 1970 is missing and 1990 and 2000. So that’s really quite an astonishing increase.
This is 2010. This is not unimportant, right? I mean, blacks are predominantly more likely
to be represented on the welfare rolls so they’re more expensive for a city, right?
So 3%, 4%, 5% of whites are on welfare; 26%, 27%, 28% of blacks are on welfare so it’s
much more expensive. Blacks generally for a variety of reasons have a lower income and
therefore pay fewer taxes. Blacks are, black youths in particular, are ten times more likely
to commit a violent crime than whites and Hispanic youths combined; therefore, more
expensive to patrol, to police, and so on. It’s a big challenge for a city to survive
with this sort of situation. It’s not, I mean, fundamentally, understand
it’s not a black issue. I mean, it’s a socialism issue. Socialism doesn’t work. I mean, the
amount of money 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 city in America measuring only the percentage
of city residents who voted for the Democratic Party. 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. His tenure remains pretty
controversial. He is credited with integrating the municipal workforce and reforming the
police departments by its administration. So a large number of scandals and he was frequently
accused of having stoked 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 ten years imprisonment
and ordered 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 for taking a bribe for a sledge-handling contract. It is heavily speculated that he
took the fall for 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
the 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 US cities and US 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 US are underfunded by a whopping $1.4 trillion or were in 2010. I mean, that’s
almost 10% of the entire US 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 liabilities. So these are promises made to pensioners that
the governments have not put money aside for. 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 but that actually would 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 close to 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 ten 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. Then we start 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 a noose 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 are some pensions and the unfunded aspect of this. This is as for the 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 worst 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 bailer? Well, Obama
promises in the past. It’s less likely to happen. It’s been a long line of bailouts,
of course, for Detroit. 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 at 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 $18 to $20
billion. Will the federal government simply give Detroit one weeks’ worth of QE and let
them escape bankruptcy? It won’t solve the problems. It doesn’t increase the literacy
of the population. It doesn’t change the general issues of corruption and overspending. 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, who’s run up a $20,000 toll of debt
and then you pay off his debt, what’s he going to do? He’s going to go, “Whoo-hoo! 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 and even say that “I refuse to let Detroit,” send them a check, President
Obama, with your own money. If you want to know what the future of the
US is going to look like, this is one of the reasons why we’re looking at the City of Detroit,
not just the US. It’s all over the west. Let’s look at the real numbers. According
to official numbers which means lies rubber stamped by the authority of the state, the
US national debt is close to $17 trillion. The US population is $310 million, $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 US 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
US 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. I actually
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 US, $275,000 of debt for every man, woman and child in
the United States, that figures an estimated 10 times higher per person debt than that
of Detroit. Is that enough? Could nationwide debt that is proportionately
ten 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 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. 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 aren’t employed, I think in the US, it’s you and you and that’s about it. You too are
totally going to get it in the shorts. I mean, you can certainly view this as an
economically better state than Detroit, but is it 25 times stronger? And while Republicans
claim to be against this kind of stimulus spending, they’re entirely fourth when it
comes to the military and industrial complex in military spending. Republicans love to
spend money on the military and then claim than 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 counter to this economic activity. 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 on our butts and
we have to stop 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 haul just like all empires beforehand, just like a statism
grows. It’s important to remember, of course, that America started it 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
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 these 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 the 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, 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. 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. 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 Molyneux for Freedomain Radio.
Thank you so much for watching. Good luck, Detroit.