Myths/liberal policies destroyed Detroit

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The Myth

Myth: Detroit's economic problems and subsequent bankruptcy were due to excessive spending on social programs.

Reality

Detroit's economy was ruined by a combination of factors:

  • heavy dependence on a single industry, i.e. automobile manufacturing
  • big business demanding steep tax breaks to keep them in Detroit after the auto industry left
  • government corruption and mismanagement

Dependence

The automobile industry made Detroit what it was, but no industry lasts forever. When management styles changed starting in the 1980s to a more aggressively profit-driven mode, the automobile companies began moving jobs from Detroit to other locations – decimating Detroit's economy in general and severely reducing tax revenue.

Tax Breaks

After the automobile industry abandoned ship, remaining large businesses then threatened to leave as well if Detroit didn't give them steep tax breaks, further eroding tax revenues.

Corruption

State lawmakers raided Detroit's share of revenue sharing payments beginning in 2003 as lawmakers and governors diverted funds to fill holes in the state budget. [1] (I also seem to recall seeing evidence of corruption within the city government itself, but at the moment I don't have my hands on any sources.)

Links

Reference

Sources

  1. 2014-03-20 Michigan Short-Changed Detroit By Millions "Instead of sharing sales tax revenue properly, Michigan kept millions intended for Detroit, effectively bankrupting the city." (report; media)

Notes