Detroit, the mid-western metropolis that one time was the
fourth-most populated city in all of the United States,
officially filed for bankruptcy last week after years of
consistently dismal economic news. But as lawmakers in Washington
weigh the option of lending a helping hand, the often out-spoken
Sen. Paul says he’ll ensure this incident serves as a lesson to
the rest of the US.
“There’s some good things that come out of bankruptcy,”
Paul said in a phone interview to Bretitbart.com last week from
Iowa. “One is you get to start over. Bankruptcy lets you be
forgiven of your debt. And you do so by getting new management,
better management and by getting rid of unwieldy contracts,
contracts that give you where public employees are getting paid
twice what private employees are and things come back more to
normal. That’s the way cities and businesses can recover.”
“I basically say he [Obama] is bailing them out over my dead
body because we don’t have any money in Washington,” Sen.
Paul added.
Detroit isn’t the only major US city as of late to look towards
bankruptcy amid dire times, but it is likely the most iconic of
American locales to lose a battle to unpaid bills. Detroit at one
point was among the most celebrated of cities due to its booming
automotive industry and its contributions to modern music. After
years barely inching by, though, Detroit followed in the heels of
Stockton, California and Harrisburg, Pennsylvania last week by joining
the list of large American cities unable to scrape up enough to
save face.
Detroit would send a sign to other cities experiencing similarly
dismal condition.
“Those who don’t have their house in order, who are teetering
on disaster, will continue to make bad decisions. And by the way
these [local and state budget choices] are tough decisions. I’m
not saying they are all prescient and that it will be easy on
everybody who works for the city or the state, but you need to
make these decisions and the sooner you make them the better. If
you wait to make them, it’s even harder on people,” he told
Breitbart journalist Matthew Boyle.
“You don’t set up an implicit promise from the federal
government that everybody is getting bailed out,” Paul said.
“It’s sort of like too big to fail for banks. If you have too
big to fail for cities or for states and they believe they’ll be
bailed out they’ll continue to make unwise decisions.”
When Stockton, California filed for bankruptcy earlier this year
in April, the city of 300,000 became the largest town in America
to throw in the towel in the history of the country. A little
more than a year earlier, lawmakers in the Pennsylvania state
capital, Harrisburg, elected to do the same after falling
hundreds of millions of dollars in debt.
Christopher Ryon, a portfolio manager at Thornburg Investment
Management, described the Harrisburg crisis to The Wall Street
Journal as “one of the slowest moving train wrecks in my
memory.”
To avoid a similar fate, officials in Michigan moved earlier this
year to bring in a state-appointed emergency manager to assess
the situation in Detroit. In turn, manager Kevyn Orr concluded, “Without a significant restructuring
of its debt, the city will be unable to break the cycle of
damaging cutbacks in essential municipal services and
investments.”
Detroit officially filed for bankruptcy last Thursday, although
Ingham County Circuit Court Judge Rosemarie Aquilina said one day
later that the process was illegal.
“I have some very serious concerns because there was this rush
to bankruptcy court that didn’t have to occur and shouldn’t have
occurred,” Judge Aquilina said.
Monday morning, Judge Aquilina adjourned a hearing on the future
of the bankruptcy filing until July 29, The Detroit News
reported.
Meanwhile, Sen. Paul — the son of former congressman and
presidential hopeful Ron Paul — continues to be floated as a
potential candidate for the GOP’s nominee in the 2016
presidential race.
Republished with permission from: RT
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