Detroit Takes The Ninth
In a move that shocked no one who has watched any financial news program in the last twelve months, the city of Detroit today filed for Chapter 9 protection under the Bankruptcy Code.
Just how bad are things there? According to the Wall Street Journal,
[Michigan Governor Rick] Snyder said the city cannot meet obligations to its citizens or its creditors. He noted that citizens wait an average of 58 minutes for the police to respond to their calls, compared to a national average of 11 minutes. Only 8.7% of cases are solved, compared to a statewide average of 30.5%.
About 40% of the city’s street lights were not functioning in the first quarter of the year, and only a third of its ambulances were in service. Its population has declined 63% from its peak and there are about 78,000 abandoned structures.
So how did we get here? Porter Stansberry laid out his case years ago. And Detroit isn't alone - there have been 36 other municipal bankruptcy filings since 2010.
What is the lesson for us? Well, if you live in Detroit, you'd better be self-sufficient for your own security and emergency medical care. If you live in a city with weak financials, I would suggest you not only make plans to be your own first responder, but also think through how you'd deal with a lack of other municipal services, like trash pick up, water, sewer, gas and electric delivery.
With an official unemployment figure at 11.8 million people and over 46 million Americans on food stamps, it's clear the economy - and thus the tax base funding municipal governments - continues to struggle to make meaningful gains in employment and tax revenues. Studying this issue may not be as sexy as reading up on freeze dried food or a trip to the gun range; nonetheless, preppers in the suburban environment need to have a good grasp of this topic.
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