Making Bankruptcy Pay

Sen.Rand Paul has floated a suggestion as to how one might deal with the problem of Detroit. The Bankruptcy judge has ruled that the city's plan, such as it is, can go forward without the unions getting fully paid first and everyone else dividing up the leftovers. Highlights of Sen Paul's plan are:

Key to Paul's plan:
— Providing eligible areas with a reduction in individual and corporate income tax to a single, flat 5 percent rate.
— Reducing the payroll tax.
— Providing child education tax credits to parents.
— Suspending EPA non-attainment designations in Economic Freedom Zone areas.
— Suspend Davis-Bacon wage requirements on federal projects.

Great as far as it goes, but note that this plan requires a great deal of cooperation from the State and Federal government to be put into effect.

Working strictly at a local level, yes, a lower tax rate always helps, but the wailing immediately begins about how on earth will we fully fund 3 sports stadiums, a fine arts center, an opera house, a motor speedway, a municipal bus system and maybe high-speed trolleys to run across town?

To which I say: We don't. Sell all that stuff off to some enterprising souls, and let them run them to suit themselves and pay the 5% on whatever they make. The city's job is to enforce the laws, maintain the water, sewer, and streets, and keep the required schools open. Not a lot else.

Sell off the municipal enterprises, whatever they are. Trash disposal, bus drivers, support people, whatever, they go with the enterprise.The municipal monopoly does NOT go with the sale. Competition is encouraged.

Let every student be fitted with a virtual pull tab on his or her collar worth say 75% of what the city is currently spending on education per student. Then let them attend whatever school they can get in to. The school, public or private, gets the tab. If they can justify it, they can ask the parents for a bit more. If they're trying to drum up business, they might even offer a bit of a refund.

Suspending the EPA with a short rope from a tall tree sounds like a fine idea, but that's a Federal deal. Repealing Davis-Bacon has always been a good idea along with several other overreaching federal statutes, but that's the job of the Senate and House.

Running a city as though it were Hong Kong would work every time. The problem is keeping the do-gooders in check to allow the model to continue to work.