MORATORIUM!!!

The first thing, the very first thing to do is to call an economic Moratorium. This moratorium consists in Detroiters not spending their money beyond its boundaries.

One consistent measure of the economic health of any community is its multiplier. It is the measure of how many times a dollar turns over in a given community: the higher the multiplier, the healthier the community. The more use a community extracts from its dollars, the more they are able to take care of the needs of that community.

The multiplier for Detroit is a negative. This means that the community is essentially bleeding to death. Detroiters don’t seem to recognize that every dime that they spend outside their community must be replaced by them through taxation. As any conservative republican can tell you, excess taxation is a drag on any economy.

I once took a friend from Washington DC to Lasalle Gardens and drove her around in the neighborhood. I stopped the car before we headed out to the mainstreet  and asked her to tell me what that street must look like, given the appearance of Lasalle Gardens. She thought there would be little upscale shops, restaurants and cafes. I then drove out onto Dexter and watched the shoc k on her face.

All the cars in that neighborhood were used to drive miles away for any type of commerce. The money was taken out of the city and deposited in the suburbs. This allowed the suburbs to have the very things that Dexter should have.

Some might say this is the usual race and class war scenario. It isn’t. This represents a basic economic reality. Those money’s spent outside of municipal boundaries do not directly support that municipality. A certain amount is returned through state tax policy but only a very small fraction. Full time shopping outside your municipal boundaries is economic suicide for any community unless they are rich to begin with.

If Detroit had leadership worth a damn, there would be some one standing there explaining to Detroiters what they have to do. It would be tough going for the first few years because Detroit has lost so much in terms of commercial infrastructure but it would force this infrastructure to be built in Detroit. Detroiters would be hired for these jobs and their taxes would bolster the city. The new stores would now be taxpayers in the city. The bleeding would stop and growth would begin.

Any idea that tries to address the future of the city of Detroit, without first addressing this key economic issue, is a load of crap. There must be a moratorium. There must be an understanding by Detroit’s citizens that their fate is in their own hands and that they must step up to the plate .