The city of Detroit’s bankruptcy filing, while expected, was without question a shocking moment for not only this region but the United States in general. A city that was once the pride of America, thriving on the booming auto industry, had finally hit rock bottom. The reasons for Detroit’s demise are many, and are too numerous and complicated to get into in this article. The bottom line is that when all of the dust settles and the legal questions are sorted out, the city’s creditors are going to get pennies on the dollar and the affect it could have on Detroit’s citizens is disastrous.
Some of you may be reading this and thinking “How does this affect me? How does this relate to personal finance?” The city’s dire financial situation undoubtedly affects the quality of life for its citizens, as city services and even essential things like police and fire are forced to do more with less. The issues with city services and the dilapidated condition of many neighborhoods have caused property values to plummet. As I said above, these issues are complicated and assigning blame to individual politicians or political parties is not my role here. Be that as it may, if I could sum up Detroit’s problems in one sentence, I’d say it this way: an inability on the part of everybody to confront reality. These problems did not develop overnight. A shrinking population and tax base combined with long term liabilities and debt has been brewing for a long time, and the clock finally struck midnight. I feel for city employees, many of which will walk away with very little of the pension money that they were counting on for their retirement. But I must go back to the fact that it was democratically elected politicians who were in charge of this mess for decades and many of them continued to get re-elected despite the city’s questionable finances.
So what can we do about it? We, as citizens, have to be more engaged. Ours is a government that is of the people, by the people and for the people. I know it’s easy to gloss over that, but democracy only truly thrives when the voting public is informed and educated on the issues and votes their conscience based on the information in front of them. This isn’t to say that one political party is always right and one is always wrong, but robotically walking into a voting booth and looking for the “R” or “D” isn’t going to cut it. Neither is always voting for things that look or sound good in the moment, because we have seen that things that might seem good in the short term have extremely negative consequences in the long term. We need to be more informed in general, particularly as it relates to local politics. Stay connected with what is happening in your community. When an issue comes before you as a voter, think big picture. If you see something that bothers you, write your mayor or city council members. If they are not responsive, make them pay for it in the voting booth. If the voting public begins holding their local politicians more accountable, hopefully more cities can avoid the fate of Detroit.