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State of Emergency in Detroit

Detroit is officially in a “State of Fiscal Emergency,” and the state is about to take control of the city’s finances. Governor Rick Snyder will soon name an emergency manager, who may have the city file for Chapter 9 bankruptcy. It would be the largest municipal bankruptcy in American history. The manager will have broad powers, the New York Times reports, to “cut city spending, change contracts with labor unions, merge or eliminate city departments, [and] urge the sale of city assets.”

This is a sad story for the hundreds of thousands of Detroiters affected by cuts in government services, but it is the logical endpoint of years of blue policy. For decades, Detroit has been doubling down on a high-cost model in which higher salaries for public workers are paid for with higher taxes. When these policies were introduced in the mid-20th century, Detroit was large enough and vibrant enough to paper over the holes in this formula. But as the city hollowed out, fewer and fewer people were left to pay the bills.

But perhaps the worst indictment of the blue model is that it has done the most damage to those it was designed to help. As Detroit cuts back, it is the poor and disadvantaged who remain in the city that will feel the brunt of the pain to come.

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