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Rusty thanks a part to -- with the state of Michigan but my next guest says this spitz is only temporary and it's actually only a matter time before Detroit files for bankruptcy.
Joining me now seek a dumb dummy up senior policy analyst for reason foundation.
You know I watch -- high drama and paying a lot of attention to that there are so many factors.
You had that the unions you have to state you have local government.
You had the potential of urban out you know uprising.
All of these things and it came down to the wire and still it's -- truly resolved as it.
Though it's not ending finally the City -- and the man agreed to sign this consent agreement that the governor had been pushing.
But it's an extremely what -- -- consent agreement.
You know the basic problem in Detroit is that you have a very very -- cost of taxpaying citizens.
Supporting -- they lied to us -- -- unions.
And the legacy costs -- -- simply unsustainable.
That you can't tax fast enough -- before -- -- promises that you had made.
And the more you backed -- and attacks but the productive -- the more it leaves the city.
And so eventually this infusion is that you've got to do something about these legacy cost which unions out of -- -- you know not going to agree to.
And what the government had wanted to do was a point there is still -- to review board.
Which would have sweeping powers to avoid these contracts but that's not something that done at the city's leaders -- you know willing to it.
But the but the government wasn't driving sees driver's seat -- -- -- -- -- replied I think you gotta get three options right at the consent agreement the board -- talking about or just sort of the push them into bankruptcy why did he play.
Why do you play harder -- he's -- You know that's a very good question I mean essentially he lost on negotiating leverage with the union when he gave them.
Hundred and put the seven million dollars to borrow on the city's credit -- I mean Detroit has already maxed out its credit cuts now which is likely it didn't have enough operating cash.
You actually be it's meet its big -- it enough this month.
So this night hadn't jumped in and given that 137 million -- Detroit would have been big crap I think there's a Paper.
Let's talk -- about the numbers for that vote for the people watching at home and I think they have thirteen billion and pension obligation to do it -- billions -- -- debt of yes and then I think they were it like down to like 4050 million dollars which is by about one month's worth of outlays that up.
That's that the very -- -- I -- did they're -- there are literally living day to day to day -- -- one -- at a time for these guys and I.
What what's what do you sense is going to happen now what you think the ultimate outcomes gonna be so.
What's going to happen is that this fight is going to get traffic that would I mean Detroit now has enough money with the confident that the seven million dollars to drag out the fiscal year.
I I don't.
I think me and what's going to happen is they're going to -- about for the yet at the same dying.
They haven't needed and that contract with the unions -- they are on the hook for the seemed kind of liability the you know and they end up and yet the hope is by that and that the man and the CD Collins and with these like these agreements.
But when they do that they could -- and riots on the street it's because unions are not going to be this -- bound yeah I mean I can -- that so whenever I beg -- to -- to be on the -- -- and -- -- six -- -- -- -- -- -- -- bankruptcy.
And then it'll be when.
Had someone from Detroit a professor who teachers out -- tell me that Detroit deserves a bailout -- GM and of course I can you can always filled with what you can you know things about.
Every time -- that the bailouts work you know being set up -- for the next handout -- I I mean.
But here's the thing I know you want to get too much into this but the same guy Sullivan at the literacy rate is only 47% that's why it but I.
I it's sort -- Charles do you invest in my company by the -- 53% of my workers can't read I'd say hell no I think so what -- stability.
Who's gonna win this battle.
-- you not and if the what the professor didn't that you was yes there was a bailout for GM and Chrysler but at the same time those company lost.
A lot of control and we'll -- you know and operations that's what Detroit's leaders don't want to give up they don't want to give up the politically controlled.
Because utility one do you know be the boss is in Detroit.
Now we ended this Specter of the social problems of Detroit I mean which company is going to going located in the city that doesn't have a cool enough and and -- -- thanks.
And the problem is you would try using these what those out by taxing them they'll be if -- Plus plus Q did she develop may have thank you so much -- staying on this we gotta get you back because this is that the amazing story apart because this could be a microcosm for this entire out so we need to -- --