We have all heard the reasons for Detroit’s bankruptcy, from the depleted tax base, to corrupt city politicians, to unsustainable city programs.
Bloomberg posted a great piece yesterday citing reasons for Detroit’s collapse along with opinions from several politicians on how to handle the city’s demise. One interesting fact from the article commented on city’s incredibly high crime rates. As noted by MLive, Detroit’s homicide rate last year was 58 victims per 100,000 residents. The city receives about $108 million annually from the federal government, $2 million of which goes to the police.
Compare these numbers to the amount of aid given to the South American country of Colombia each year. Colombia, with a homicide rate of 32 victims per 100,000 residents, gets an astonishing $323 million from the U.S. federal government each year. Seventy-five percent of that money, according to the U.S. State Department, goes toward “peace and security” measures.
While these aid numbers get spread out amongst a very different number of people — Detroit has 700,000 residents while Colombia has 47 million — it is still interesting to see how much money America ships overseas. In Colombia’s case, most of this money funds the war on drugs.
The news comes as many continue to speculate on whether the Obama administration will bailout the city of Detroit. The city filed a record $18 billion bankruptcy claim on July 18. The last time the federal government bailed out a city was in 1975 when President Gerald Ford signed the New York City Seasonal Financing Act. The act gave New York City $9.5 billion in federal aid. Accounting for inflation, that number would equal almost $40 billion in aid today.
Here is a list of federal bailouts dating back to 1970. The list was created by ProPublica.
●Penn Central - 1970 - $3.2 billion
●Lockheed - 1971 - $1.4 billion
●Franklin National Bank - 1974 - $7.8 billion
●New York City - 1975 - $9.4 billion
●Chrysler - 1980 - $4.0 billion
●Continental Illinois National Bank and Trust Company - 1984 - $9.5 billion
●Savings & Loan - 1989 - $293.3 billion
●Airline Industry - 2001 - $18.6 billion
●Bear Stearns - 2008 - $30 billion
●Fannie Mae / Freddie Mac - 2008 - $400 billion
●American International Group (A.I.G.) - 2008 - $180 billion
●Auto Industry - 2008 - $25 billion
●Troubled Asset Relief Program - 2008 - $700 billion
●Citigroup - 2008 - $280 billion
●Bank of America - 2009 - $142.2 billion