Detroit is in dire straits these days, and the Motor City could give us a hint as to where America is headed.
Faced with limited resources, a $155 million deficit and a declining population, that city’s mayor, Dave Bing, is implementing what he calls the Detroit Works Project. Under the plan, more populated neighborhoods with a better chance of making it will receive more city services than those overrun by abandoned homes. Fire, police and emergency medical services will remain the same throughout the city, and plans to contract the city, depopulate empty areas and relocate people to concentrated areas have been abandoned. Meanwhile, the city will focus on demolishing crumbling, vacant buildings, and improving vacant lots and recreational areas.
Despite the name of this new project, Detroit isn’t working, and neither is America. Is this what the U.S. is destined to become, absent some badly needed injection of compassion? And are we ready, and why has it come to this?
After hearing about the Detroit Works Project, my initial reaction was that it represented, at best, municipal triage. You can’t save everyone in the city, so you prioritize, as the theory goes. At its worst, it smacks of Social Darwinism, survival of the fittest. But you really can’t blame hungry and hurting places like Detroit — out of cash, options and luck — for making tough choices.
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Localities throughout the country are forced to cut and eliminate vital services such as the police, and reduce public school sessions from five to four days a week. And in Michigan, the cold-hearted, cold-blooded Tea Party governor has established a form of financial marshal law, in which the state government has the power to push aside a city’s duly-elected officials and replace them with an appointed financial manager. Union contracts thrown in the garbage, elected school boards disbanded, city services privatized, you name it.
When I worked in Detroit in the ‘90s as a financial analyst in the auto industry, I viewed the city as a symbol of a declining and segregated America — with blighted remnants of the 1960s riots, and a mostly poor chocolate city surrounded by more affluent white suburbs. Once a monument to American industry and prosperity, Motown fell victim to urban decay, a policy of neglect, white flight and competition from Japanese automakers. Obviously, things have progressed from bad to the unthinkable.
And yet it seems the current deficit-debt ceiling debate in Washington, a manufactured crisis, to be sure, is about to turn the nation into one big Detroit.
Despite the suffering in Detroit and elsewhere, there is a disconnect among the beltway Washington crowd. Although jobs are a top priority for voters, there are no jobs bills making their way through Congress. However, Congress has held hearings on radical Islam — three of them. Oh, and they’re going after that overarching threat to U.S. security and stability known as Planned Parenthood. Perhaps it is something in the water from the Potomac River that has made these lawmakers’ heads fuzzy. Or perhaps the corrupting influence of campaign financing has blinded them to the needs of their constituents.
Still, for the Tea Party Republicans in Congress, a far more insidious explanation looms — they simply couldn’t care less. The far-off-the-deep-end wing of the GOP that controls the House of Representatives — and oddly, the national dialogue — has turned an otherwise routine procedure of raising the nation’s debt ceiling into a problem. It is simple: a failure to increase America’s credit line means that the government will be unable to pay its debts for its past purchases. The nation’s credit rating will drop, as would yours if you failed to pay your creditors, making it more difficult to finance a car, a home, college and other necessities of life.
Pandering to the Tea Party, Congressional Republicans compare raising the debt ceiling to a household that needs to live within its means. This comparison is misplaced. “The American people may have voted for divided government, but they didn’t vote for a dysfunctional government,” President Obama remarked earlier this week in a prime-time speech. “It is a dangerous game we’ve never played before,” Obama added, “and we can’t afford to play it now.”
The danger of which the president speaks is the congressional hostage-taking we are witnessing at this moment. Republicans refuse to budge on raising the debt ceiling unless they can balance the budget by enacting deep cuts in social welfare spending without any increases in revenue — including closing tax loopholes, eliminating corporate subsidies, and increasing taxes for the wealthy.
As the bipartisan Center on Budget and Policy Priorities argues, House Speaker John Boehner’s deficit reduction plan is pure “class warfare” that will eliminate the safety net for children, and “could well produce the greatest increase in poverty and hardship produced by any law in modern U.S. history.” Meanwhile, no one is discussing cuts to defense spending. Contrary to the Republican conventional wisdom, the national debt and deficit did not cause our current economic woes. Rather, that was the handiwork of reckless casino gambling in the financial markets. And the feds — deregulated under Bill Clinton and Republican administrations alike — were ill-equipped to rein in Wall Street. Bush’s wars in Iraq and Afghanistan, his tax cuts for the rich, and his unfunded Medicare Part D plan created the deficit.
As a result of the Great Recession, millions have lost their homes and their livelihoods. And economic gains made by people of color were wiped out altogether. The wealth gap between whites and minorities is now the widest in 25 years, with white net worth 20 times the net worth of blacks, and 18 times the net worth of Latinos.
In 2009, the median wealth of white households in the U.S. was $113,149, as opposed to a mere $6,325 for Latinos and $5,677 for blacks. Between 2005 and 2009, Latinos lost two-thirds of their net worth, Asian-Americans 54 percent, and African-Americans 53 percent.
And now, there is far too much money in too few hands. Funny how the jobless, underemployed and foreclosed upon don’t want to spend money. That continues to fuel the bad economy, while Tea Party-led austerity measures across the country — of slashing state government jobs, services and programs — only further shrinks an already failing economy. Fiscal responsibility has its place, and slashing government spending with over 9 percent unemployment is suicidal fiscal policy.
Meanwhile, a U.S. default will bring down the American financial system, and the global economy as well. According to one member of the British Parliament, “The irony of the situation at the moment, with markets opening tomorrow morning, is that the biggest threat to the world financial system comes from a few right-wing nutters in the American Congress rather than the euro-zone.”
Many Republicans have vowed to vote against raising the debt ceiling, which reflects their hatred of government. Either they don’t believe the country will suffer, or they simply don’t care. Their preference is to shrink the size of government so that it is small enough to drown in a bathtub. It should makes you wonder why these individuals want to work for the government in the first place. The angry right-wing faithful do not believe government should be in the business of Social Security, Medicare and Medicaid, or anything short of cutting taxes.
Further, not unlike the prevailing conservative attitude towards cutting aid to welfare recipients in the 1980s and 1990s, some GOP lawmakers favor a default because they believe it will be “tough medicine” for America.
Nevertheless, other observers suggest that the Republicans are wrecking the economy — and ruining all chances of job growth and recovery — all for their own political advantage. After all, Senate minority leader Mitch McConnell once stated that “the single most important thing we want to achieve is for President Obama to be a one-term president.”
How ironic that if left with few options, the first black president is being urged to raise the debt limit by invoking the Fourteenth Amendment — ironically a creation of the nineteenth century Republican Party and now an anathema to today’s Tea Party GOP.
But whether or not the U.S. defaults and is unable to pay the bills, or Wall Street and the Chamber of Commerce are able to bring the Republicans to their senses, America’s structural economic problems will persist.
Our nation’s policy priorities represent an ongoing assault on the economic well-being of poor, working-class and middle-class folks. If we fail to address the chill in this summer’s political air, this callousness coming from Washington, it will surely turn us all into Detroiters. Now do you understand why elections matter?