Detroit’s emergency manager announced last Friday that the city would stop paying approximately $2.5 billion in debts. He got several hundred creditors together and explained the dire situation to them. It looks like pensioners and bondholders are going to take it on the chin. The city is offering them around 10 cents on the dollar, which could be a very good deal, especially if Detroit must file for bankruptcy protection. Then all bets are off! However, Mr. Orr needs to do more than simply rearrange the deck chairs on this fiscal Titanic. He should take this opportunity to privatize virtually all of Detroit’s services, eliminate the public school system and develop new economic opportunities to help restore this once great city. Whether it’s urban marijuana farming, expanding the airport or cutting taxes to an essential minimum, now is the time for bold initiatives. Otherwise, Detroit will further devolve into a dystopian image of America’s post-industrial future.
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