About Me

In writing the "About Me" portion of this blog I thought about the purpose of the blog - namely, preventing the growth of Socialism & stopping the Death Of Democracy in the American Republic & returning her to the "liberty to abundance" stage of our history. One word descriptions of people's philosophies or purposes are quite often inadequate. I feel that I am "liberal" meaning that I am broad minded, independent, generous, hospitable, & magnanimous. Under these terms "liberal" is a perfectly good word that has been corrupted over the years to mean the person is a left-winger or as Mark Levin more accurately wrote in his book "Liberty & Tyranny" a "statist" - someone looking for government or state control of society. I am certainly not that & have dedicated the blog to fighting this. I believe that I find what I am when I consider whether or not I am a "conservative" & specifically when I ask what is it that I am trying to conserve? It is the libertarian principles that America was founded upon & originally followed. That is the Return To Excellence that this blog is named for & is all about.

Monday, August 12, 2013

Detroit - The Arsenal Of Democracy Hangs By A Thread

click on graph to enlarge
As a follow up to the last posting that showed how the current city of Detroit is a microcosm of future America please click on this link of Mike Huckabee's excellent video from his July 20 program on FNC where Governor Huckabee presented the first eight chapters of Detroit's history that led to the filing for bankruptcy under Chapter 9 of the bankruptcy laws.  Chapter 10 depicts America's decline under BO's vision that involves all of us.
As the employment-unemployment statistics deteriorate & part time jobs, government dependency, & family wealth spend down continues throughout the citizenry, without a whimper, terrible heart wrenching examples come to light.  I know of an example where the husband has disability income, the wife is unemployed, & both the husband & wife have sold their wedding rings to help make ends meet.  Hard to believe this could happen if you didn't see it with your own eyes.
But not everyone is waiting for the metaphorical ax to fall.  The above graph shows the increase in the number of people who have renounced their U.S. citizenship or permanent resident status since 2006 – notice the increase since BO took office.  If the top 1% of income earners, or others on the way up, were smart enough to get to this top rung they are not going to be dumb enough not to have an exit plan.  America will miss them one day just like Detroit does already.
Many investors in the readership will recall in the 1980s the largest municipal bond default in U.S. history – the Washington Public Power Supply System (WPPSS) which became infamously known on Wall Street as "Whoops".  The agency could not repay $2.25 billion (in 1983 dollars) in bonds used to finance partial construction of two nuclear power plants.  Other Washington state bonds with AA ratings saw their values plummet just because of the name Washington on their highly rated bonds – of course this was a tremendous buying opportunity for some.
Well a similar thing has already started happening in Michigan & is spreading throughout the $3.7 trillion U.S. market for bonds sold by cities, states, & other government related entities.  Genesee County, Battle Creek, Saginaw County, & triple-A-rated counties Macomb & Oakland which borders Detroit's Wayne County are all making pitches to the ratings firms not to lower their ratings just because of proximity to toxic Detroit – whose municipal bankruptcy filing is the country's largest.  Last week Saginaw County postponed a $60 million bond offering because of low investor demand meaning higher interest cost than the county could afford.
The U.S. municipal bond market is about the same size as the market capitalization of China's stock market – domestically incorporated companies listed on China's stock exchanges - so it can have a significant impact on the American economy.
To help understand the microcosm relationship Detroit may very well have with America substitute "America" for Detroit as you think appropriate in the following:
At one time Detroit was America's wealthiest city by per capita income & fourth largest by population – then its manufacturing base collapsed.  Today Detroit is the city with America's lowest median income ($25,000), it has lost over 60% from its peak population, over half the children in the city live in poverty, just under half the residents are functionally illiterate, & the unemployment rate is 18%.  One third of Detroit's 140 square miles is a wasteland – forlorn, forsaken, vacant, &/or deserted.  The decreasing population abandoned over 33,000 homes.  There are now 91,000 vacant lots.  In some areas houses on entire blocks have been razed.  Some neighborhoods have ceased to exist & as they disappeared so did all traces of human life. 
Wild dogs roam the streets, hunting the pheasants, turkeys, opossums, roosters and raccoons that have returned to the city.  Detroit is
a city without a major chain grocery store. 
The median house price is little more than pocket change compared to housing prices in other areas of the country.  The city has put in place all of the statist's dream government-dependent programs from establishing a living wage that exceeds the federal minimum wage to supporting teachers' unions with very high per student spending that still produces extremely poor results (in 2008 there was less than a 25% high school graduation rate & in 2013 less than 20% of graduates were considered ready for college).  Detroit has borrowed to meet its operating costs & pension & healthcare insurance liabilities & as such retirees face an uncertain future.  The city's homicide rate is @ a 40 year high & it has been on the most dangerous cities in America list for over 20 years. 
Some of the above should sound & look familiar already in many areas of our country.  It should not be hard to imagine the rest of the country following suit as BO's plan continues to be implemented. 
The cost of the citizenry not being involved is clearly shown above regarding what our futures look like with the prevailing government-dependent mindset.  It is getting very late but it must be recognized that national political leaders who want to continue the type of policies that led Detroit to ruin are not on the same team – in fact they are on the exact opposite team - with the rest of the unsuspecting citizenry who are being led to the same fate experienced by the people of Detroit.
After FDR's December 29, 1940 speech Detroit became known as "The Arsenal Of Democracy" because of its strength as a car manufacturer that could quickly adapt its manufacturing capabilities to build jeeps, M-5 tanks, & B-24 bombers.  In fact FDR honored Detroit's efforts in this regard by declaring it "the great arsenal of democracy."  Also, labor union leader Walter Reuther (UAW) said "Like England's battles were won on the playing fields of Eton, America's were won on the assembly lines of Detroit."
All of this capability & patriotism is slipping away – it hangs by a thread not just in Detroit but across America.
Below is the transcript of Governor Huckabee's excellent monologue from the above referenced video.
"Detroit is broke. Belly up. Busted. Bankrupt. Largest city in the history of the U.S. to file for Chapter 9. But a city the size and significance of Detroit doesn't go straight to chapter 9. For over 100 years, Detroit has been the leading edge of trends in America. Chapter 1 was the birth of the automobile and the creative geniuses who innovated the internal combustion engine and harnessed its power to move people from place to place much faster than horses and much more individually than trains. Chapter 2 was when Henry Ford conceived of a new method of manufacturing the car that would revolutionize industry and the economy. Chapter 3 was that mass manufacturing made the cost of a car affordable for the masses and cars became a ubiquitous fixture in American life and the symbol of upward mobility. Chapter 4 was Detroit saving America. It was precisely the Motor City's prowess at turning steel, chrome, aluminum, & rubber into personal transportation to making planes, tanks, and ships that gave us the tools to win World War 2. Without Detroit, we might all be speaking German or Japanese. America must never forget Chapter 4. Chapter 5 is that after the war, Detroit once again unleashed its magic into building post-war America into a nation of industrial workers who made good money and good machines and whose heavy lifting created the Happy Days into which Baby Boomers were born and the middle class that gave their parents the steps of the ladder to climb beyond the poverty of the Depression and the pain of the war. Chapter 6 was Detroit's contribution to the culture. It was the greenhouse of the music of our lives---from the immortal moves of Barry Gordy's Motown sound to the hard charging guitars of Nugent, Mitch Ryder, the MC5, America's pop culture was influenced if not shaped as much as was our taste for whitewall tires, chrome grills, and bucket seats. Chapter 7 was one of America's largest cities being rocked by the race riots of the 60s and the beginning of the polarization that led to white flight to the suburbs and the beginning of a population decline. Chapter 8 was Detroit being utterly ruined by breathtaking corruption of its local government and by union demands for a bigger piece of a shrinking pie both in the private and the public sector. The city's government didn't have the will to rein in the corruption nor the guts to say no to the unions. And that took them to Chapter 9.  Bankruptcy. The saddest part of the Detroit story is that it's not the story of a failed city who couldn't. It's the story of one of the world's great and most successful cities who could, and who did great things, but then was willing to sell its soul for lesser things and to tolerate unthinkable things. It's unemployment rate has tripled since 2000 and is twice the national average; and its street lights don't work much more regularly than its people—40% of the street lights stay dark. It's homicide rate is epidemic and for 20 years, it's been considered one of America's most dangerous cities. It takes the police an average of 58 minutes to respond to a call compared to 11 minutes average elsewhere. Just under 80,000 city structures have been abandoned. Detroit once was the leading edge of America. Now the bad news: It still is. Take a good look at Detroit in all its former glory and current gore and know that as it has been on the front of America's trends, it still is. Detroit is today what the rest of America is on track to being in another 20 years--Reckless spending, corrupt unaccountable government, and caving in to demands from those dependent on its cowardice to never say no. If we don't learn from Detroit's collapse, the rest of America will be the next chapter."


  1. One more point:

    Regarding increasing rate of expatriation:
    If this continues, this will accelerate the destruction of wealth creation in the U.S., the growth of Dependency on Government class, and the leveling of global economic field. To the Leftist elite all 3 will increase probability of a New World Order which is their goal after all. This promises to be a much weaker U.S. and a much stronger world Government, a 21st Century variant of Marxism. So do not expect the Left elite to complain much about expatriation

  2. Muni bond rates can skyrocket then the rates can spread to states and ultimately US Treasuries. High time to rein in public spending.

    Since Detroit filed the biggest municipal bankruptcy ever on July 18, the S&P Municipal Bond Index—a proxy for the broader municipal-bond market—has dropped 0.97%, as of Aug. 7. The index tracks about $1.4 trillion worth of bonds, so the nearly 1% in negative return represents lost value of about $13.8 billion.

    The true lost value is likely larger, given that the index tracks only a portion of the $3.7 trillion muni market.

  3. Would be interesting if we could get a breakdown of the political leanings of the renouncers. Denise Rich and the Facebook fellow is easy to figure, wonder about the others.

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    2. Don’t know if Denise Rich & the Facebook fellow are the norm or not for the over 1,800 people who renounced in the last two quarters. I would like to see one who did not renounce for income tax reasons though. Taxpayers aren’t required to explain but people who study such matters say the recent rise is due to tougher laws & enforcement (the government needs the money). Many people living abroad are subject to U.S. income taxes & also the government may tax people deemed to be citizens just because they were born in America & are therefor subject to income taxes per the IRS interpretation of the Constitution. The Foreign Account Tax Compliance Act (Fatca) requires foreign institutions to certify they aren’t hiding U.S. taxpayer assets – Fatca is also causing some of these institutions to reject U.S. customers. In addition, the cost of compliance with various rules & regulations can be steep. One example cited was a woman who renounced over 40 years ago & has incurred over $40,000 in compliance costs in recent years that she said has “added nothing but stress.” Another IRS abuse that the FairTax eliminates.

      I think the breakdown of political leanings of the 1,800 renouncers is by far the least important part of the message of the posting though. The country hanging by a thread is the point. If this is not corrected the 1,800 will be OK – the rest of us will be paddle less.

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