John whats up with detroit . Can this happen to your town . Thats our show tonight. And now john stossel. John detroit was once the richest city in america. I was three years old and. That was the 1950s. Now its the biggest u. S. City ever to declare bankruptcy. So what happened . Our guests tonight have some clues. First, fox News Reporter works in detroit and just wrote, detroit, an americanutopsy. An autopsy, one examines the dead body and tries to find out what killed him. Detroit isnt that exactly. What killed the trust . Would kill the charge, racial conflict of detroit. Slav kl detroit. Corruption children. It seems like that is what has become the american way because detroit is not alone. What is baltimore going to do, atlanta, l. A. John detroit is and worse shape. Worse politicians, morenions. The automaker collapsed. It was in the politicians fault. It was just the big three crashed. It wasll of them. One industry town. We were rich. We thought it would never end. Everybody put their hand in the till from management to politicians to unions. You could punch and your body will he went drinking. We blew it. I know everyone is watching, not because you care, but your review will beike us. John we want to see, maybe bankruptcy is the answer, but this may mean stiffing tohe people who were promised pensions. They may get 0. 20 on the dollar i know. The golden age is over. We really just run it. Or in a new era now. Who even knows what money is worth. A promise, contract. Pensioners might take a very bad it. Its what was left us, neglect, sloth, and ripping people off. The people didnt take it. Who took it . Detroit was perpetually on fire. We have 7,000 carsons per year. Do the math. Thirty days. We have a Fire Department where the alarm still working inside. Holes in the booths. The engines we quarter. Sometimes the engine show up and capump water. Thats not the fault go ahead john they took out the fire polls and sold the brass. Scrap them. They did. Gone. Everything now is a personnel. John the city did manage to build a new 60 Million Building to house Fire Department officials. You tried to confront the deputy fire commissioner about that. He was not eager to talk. Deputy commissioner. And not sure if he was talking to me or you. Youre in charge of the maintenance of these fire houses. Responding 60 million on a new Public Safety headquarters. The house the visit today should be condemned. How do you respond . What you tell the truth. John in this case this man was fired. As he shouldve been. You dont get to stop people around because your ampule they ask you, especially in your official capacity as the man responsible for making sure hoes are clean and safe and not like some backwater or house into one of. Out on now. Is it is acceptable or you leave live . Is it acceptable that night when one goes down and breaks for 15 hours. John in detroit if you call 911 you can be sure the police will come. You interviewed one single woman living alone that had been robbed and was afraid to go inside her home because the thieves might still be there. She was waiting for the police. I called them an hou ago and they still have a gun here. They get the tv, the game machine, the laptop. Oneandaha hours and still no cops. Cops arrived four hours later. They say they came as soon as they were assigned the call. John you say setimes the whole system goes down, but even when the system as it down there just arent enough cops or its badly m managed. All of the above. Its badly managed. We dont have enough squad car sometimes to carry the cops around. The cars dont have computers in them. The cars dontave radios and then. They use their cell phones. Are you kidding me . Imagine one of our ladies coast to work, comes on and someone has broken in. I want to muscle to show up and make sure she ses as she can get an ounce. We cant even do that. What do we do . What the citizens are in themselves. Now it will all be our own police. John it may work out better than relying on government. Now we have this deal and florida. Maybe we are thinking it didnt work out better. Maybe we should leave policing to police. John lets look at in a documentary about detroit it shows what parts of the city of lucknow city are like now. Of firebomb. A lot of the antisocial behavior and violence is because communities a broken dn three people on interacve one another. In many cases they dont see themselves as a Community Even though they live next door to one another. Is bad for other people. Tess is just regular. It aint nothing else. John the documentary was made by Andrew Rodney who grew up in a suburb of detroit. You titled the film deforest. Why . It means to take property from its Rightful Owner by force. We title did that because i cannot think of more accurate word to describe what is at the bill last 50 years in detroit. John the politicians would say today, we have plan. We can build these clean New Buildings with our friends here and use eminent dain to kick people out of their homes. Yes. That happened many times. It happened with the pull town plan. Gm. John that was a neighborhood. Lots of people live there. Politicians sai it will put an auto pla in there. And they kicked out dozens of peop to make space. John what makes deterred worse than other cities . Its just the first. It is the first city to experience a lot of the planning that went into a lot of cities. The Federal Home Loan Bank board was a national program, but it was first in detroit where there really start to build the neighborhoods around these federal subsidies which sprawled them out and also racially segregated them. The third highest incomex of any major city. Yet theres no money. How can that be . I love to know where the money went, but better were the people went. When you pay the high income taxes, the only utility tax in the state, the highest car insurance, the hhest honors insurance, the schools stink and you get no police, you know what happens to the money, they hit a mile road. The only people left the people broke paying the highest income taxes. 10 percent of the dollar is 0. 10. John both of you talk about this a mile road. The title of the movie. You were tohe plan. Whats the significance . Well, its been 8lane ghway, but it might as well be a border between tto countries. Is the dividing line between detroit and the northern suburb things politically, economilly john rich and poor. Pretty much. Things on both side of the alliance and night and day difference. John the politicns are going to improve the life of the poor building housing projects . This was another one of their grand schemes. Once like Brewster Douglas housing project. What happened . What happened . Exactly what happens when federal officials trying plan housing projects. It falls to pieces in a time and all. John thank you, andrew and charlie. Next, detroits mayor darks 50 trips, night clubs, rented limos. Taxpayers paid for it. What is up with detroit . Unethical, illegal whe small mentality has to stop. John detroit was once the most prosperous city in america. Where did the money go . The fall of the big three did not help, but politicians made it worse, they squandered money. Detrts mayor is launched big projects like the people mover which turns out all the move people in one direction and not many is the thought. Then theres a 350 million Renaissance Center and the very expensive jail. When the money ran out detroit started to decay, politicians said things like this. We shall go forward. Ththe toward show again become e great city that is its destiny. John 20 years later the mayor was still in Office Making similarromises. Detroit is alive and well. Rihanna not coming back. Were back. John when people criticize him a call the critics racist. To attack. John that generally shuns people of. A letter mayor and his cronies found new ways to let the city. The term city all into a den of briribes and kickbacks making themselves rich. What is the issue . Have violated any rules . Gabba you come back with no. John actually, i jury eventually came back with yes. He will be sentenced this fall. Now, there are crooked politicians and politicians to overpromise everywhere. Why is detroit in the worst . Lets ask the reason foundation. She lives in detroit. The Goldwater Institute citys local government. What happened to your town . Well, detroit turned into a oneparty town. For 50 yrs it was ruled by one party, which means that usually you get the stupid party. In detroits case there was no suchheck. You get out of control spending and corruption and waste. John i assume they are in town. They know that some day somebody has to pay for this. Yes. Theyre not dumb. Theyre just very greedy. No one is thinking about the longterm horizon. All the thinking about is getting reelected and which constituency they need to buy in order to do that. In detroit, as all of michigan, unions and especially public unions are extremely strong. John you study this around the country. What doesities to that is better . Its so interesting. Detroit used to be called the paris of the midwest. Of course today 28,000 debt per person. You can lk to other cities that are operating in the black with cash on hand, were Winning Public parks, all kinds of things. John was the difference . Number one, sandy spring georgia, the city that privatized nearly everything. By privatizing garbage, sewage, accounting, back office operations. They cut the cost of government in half. Any city in america could benefit from just that one provion. John by Government Employees but things still run well. Well, when she was talking about the strength of the unions, that Something Else the Sandy Springs has right. By privatizing these services, you dont have the unions. So you only have five Government Employees. John and the town is smaller than the charge, but still hundred thousand pple. There have been five more cities to come along and copy this Sandy Springs model. John and while detroit is what debt per person . 28,000 per person. John Sandy Springs. Nine, operating totally in the black. Theyre charter requires them to have a cash operating reserve which is how they pay for capital projects. John yorktown got in the worst trouble because your last mayor was taken money for himself, kilpatrick. Hesed city funds to fund junkets, 54 trips, when zero rentals, but the charges, hired 29 of his closest friends and family for city positions. People didnt notice . That was not even the worst of it. The worst of it that he was actually using he was receiving kickbacks for fines of his choice to give and city contracts to his favorite cronies that used to be called friends and family in detroit. So he used to talk a good game. He would talk to bring all kinds of development to detroit at the same time as he was talking about theig game he was quietly siphoning the city coffers for money which is one reason why the chart was left in the financial mess. John trucks are crooks, but even regular politicians wreck cities. I will confront one of your city council members. We want to make it easier for business. Giving them taxreaks. They have all these deals. Whats wrong with that . Theyre giving tax breaks to businesses that they have handpicked. These this is the kind of mentality. Th like big, glamorous things. At the same time as detroit, in subsidizing these big businesses going after noncompliance, little momandpop stores. Operating illegally. John operation compliance. Were going to shut down 20 on lices businesses every week. Thats right. John of their unlinsed maybe they should shut down. Well, bob licensed businesses are providing Vital Services today. These are businesses that theyre selling chief heap tires, sond and appliances. This is a ty that is losing about 300 people. The population has dropped from 2 million to under 700,000. This town needs businesses. It needs residents. Taxing them and regulating the business to drive more of them now. John darcy, you list three things that all city should do. Ivatization, water the of a two . Well, transparenc which is a big one. Gaithersburg, md. , has zeroead and half for 40 years. Everything they do, these contracts, all of those contracts, or on line. Audits, accounting. It helps. A little bit of sunshine let people know whats going on and creates a culture of trust which is important for getting people to want to invest and come back into the city. John before a city can get new debts goldwater says voters should have to approve it. Bonds have to go before the voters. Quite often they say no. Thats a great check on curbing these huge liabilities. John despite all the debt coming to church as the third hiest income tax of any major city. After philadelphia and lewisville which are doing that great either. Detroit is in the worst shpe. Detroit, it even taxes and utility bills of residence. I think it might be the only city that does that. It has property taxes, business taxes and utility taxes. John thank you. Coming up, a libertarian has a plan to turn part of detroit into a mostly governmentfree zone. Will that work . Are will cfront the politician whoho wont talk. Next, the rain reason the main reason detroit is broke. We can borrow. In fact charlie really couldnt borrow money more recently. Well them. Detroits new emergency manager. Detrts elected politicians spent all the money. This spend billions more. Suppose to give detroit out of that mess without stripng workers of their pensions until care is not clear. Michigans former ste majority leader. What will happen . The judge will push the reset button. It will be the largest city in america ever to go into bankruptcy, federal bankruptcy. Everybody, kern workers, caroer47 separate public unions in the city of detroit. In fact, some o the unions have only one member. Its hard for me to envision. Of one man union. And i just dont think politically a union can go to its members and say we agree to wage cuts or cuts to pensions are cuts to health care which is why i think it ends up in front to a federaludge. The emergency manager of the charge might not say this to anybody. I think he prefers to in chapter nine. He has more power. A judge can say to the unions, you know, you can protest all you want to value a michael ix 00 monday morning. You have an hour to make your case and then on my decision. I really think that he prefers to be in chapter nine. John how big hair cut . Three in a half billion in the red which means a union worker thinks he has 50,000 year might only get 30 . Well, the judge is going to make that decision in a bankruptcy court. And i really let me just say this. I have a great deal of sympathy for the average pensioner or the average retiree because they are not really getting a lot of money. John and they do nothing wrong. They did negotiate the deals. They did under invest in the pension fund. Detroit has to pension funds. One for police and fire and one for general employee use which is the larger. That fund is a mess. 30 percent of the investments are unrealistic. So the political managers said, lets invest inhis and it made no money. Somebodys friend, someones uncle, someones cousin. And that pension fund is under investigation as we speak. John i see that the pension boardd 22,000 to send for truses to why. This is at a time when the pension fund is headed for baruptcy. Once again, its up the pensioners fault. As the flt of people who are mismanaging the fun. Thefault of Union Contracts that the city could never afford but the politician says, want to say yes. John these guys are like me and when the bomb hits all be long gone. Did they even think that way . Cities all over this nation deal with those kinds of problems. The problem in the city of detroit is the leaders never really confronted it and tell what it. Was almost as if there were on remotecontrol model pilot, thinking someone would come in and bail them t over time. As we have seen in the promo to thisegment of your sry, those days are over. There is no more money. Borrowing from peter to pay paul and the ball to pay peter, those days are over. Theres no money left. John thank you. Coming out, weill confront one of those toward politicians. Up next, a tour of detroits ruins. There was a dead body found over year. John whats up wit detroit . The city is a mess. About twothirds of its population left town. All neighborhoods are crumbling. Recently special correspondent clock three detroit. That house over their right behind you is literally being consumed by weeds. Thats one example of so many. He works for one of the Community Groups is trying to clean of neighborhoods. This one needs it, despite signs like this one. Much of it looks like a garbage dump. Thats good news. Absolutely. But are they going to pick up all of thii . I dont think so. What is the strangest,reepy as thing or thingssthat they found as they try and remove the blade and the trash . The worst thing was an actual dead body that was found over year. Bowling balls. You name it, kitchen sinks, refrigerators. The remnants of life. John many people left neighborhoods like these because there are so few basic services. , 11 in the ambulance may not come. The reality is that pick themselves up and put themselves in their cars to take them to the austral. John said amidst the garbage an abandoned property there is life. You see this house, nice motorcycle of front. How does this person and i . Two things. They have hope. To, they like their neighborhood john they found a home owner. Empty lots and and the houses across the street. What keeps you here . Well, i want to stay here in the city. Im here. To you ever worry abouthat happens in the empty houses and ether or not people are going to come after your stuff . I kind of keep the lot cut, closed doors on the abandoned houses, stuff like that. To keep an eye on them. You have to. To use to have neighbors. Yes. People just they moved out. John and this was typical of what y saw. It was neighborhood after neighborhood. Nice trees with nice homes and then a block away it was these abandoned, burned out homes. They were being devoured by the earth. Detroit is falling back into the earth, and thats all bad john its not so great. It has some problem areas. For your show we have been the some problem areas. For sale signs, people moving out, homes under water. People give up and walk ay, but thats just for sale signs. This is literally a Civ