Detroit, Michigan’s bankruptcy filing is causing fear that other major U.S. cities face a similar fate as they too are dealing with burdensome underfunded liabilities like retiree benefits.
There will be no winners once Detroit enters bankruptcy. Those who were promised health and retirement benefits are going to be faced with stark painful reality. Bondholders are going to take a massive haircut. Those residents still living there will have to tighten their belts still further.
If Washington D.C.'s Mayor Vincent Gray doesn't veto a discriminatory minimum-wage law targeted at Walmart, the retailer is likely to shrug, and find other friendlier places to do business.
There are political costs as well, but the 75 percent reduction in Americans' standard of living shows just how costly the regulatory state has been for the country over the last 56 years. By Bob Adelmann