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"Fiscal Responsibility"

"Fiscal Responsibility" image
Parent Issue
Day
22
Month
April
Year
1976
OCR Text

While the city of Detroit is being forced to lay off thousands of employees, eliminate entire departments of city government, and cut back essential services to the bone and beyond in an effort to keep from going bankrupt, it is particularly offensive to have to listen to the city's bankers lecture the Coleman Young administration about "fiscal responsibility"—while they deny the city badly-needed credit and jack up their interest rates to boot.

How is the city supposed to "balance its budget" if the banks refuse to lend the city the money it needs and make it more difficult to repay the money they do see fit to lend?

The banks are already deeply implicated in the causes of the city's current hardships through their well-known, and illegal, practice of redlining—that is, refusing to lend money to homeowners, prospective home buyers, and private developers in most areas of Detroit's central city. The city's lending institutions, who hold perhaps 70 per cent of its abandoned real estate, don't even have the decency to pay for demolition of their dangerous structures, let along rehabilitate them. They'd rather wait for the city to do it, at about $2,000 per job.

The banks seem determined to take Detroit down the same road as New York City, setting themselves up to pass judgment on how the city spends its money and demanding ever-greater cutbacks, to the point of endangering the health and safety of the city's residents, in return for their grudging financial assistance. The day may not be far off when they refuse to handle Detroit's next bond issue, forcing the city to beg to be "bailed out."

Until Detroit's bankers face up to their responsibility to this community, those who deposit their money with banks who redline should seriously consider putting their hardearned bucks into a more worthwhile cause.