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 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 american autopsy. 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 kill 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, more unions. The automaker collapsed. It was in the politicians fault. It was just the big three crashed. It was all of them. One industry town. We were rich. We thought it would never end. Evybody put their hand in the till from management politicians to unions. You could pch and your body will he went drinking. We blew it. I know everyone is watching, not because you care, but your view will be like us. John we want to see, maybe bankruptcy is the answer, but this may mean stiffing to the people who were promised pensions. They may get 0. 20 on the dollar i know. The golden a is over. We really just run it. Or in a new era now. Who even knows what money is worth. A promise, contract. Pensionersight 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 ppetually 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 can pump 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. Johnthe 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 o 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 houses a 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 themn hour ago and they still have a gun here. They get the tv, the game machine, the laptop. Oneandahalf 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 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 dont have 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 saves 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 down three people on Interactive 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 a more accurate word to describe what is at the bill last 50 years in detroit. John the politicians wouldsay today, we have a plan. We can build these clean New Buildings with our friends here and use Eminent Domain to kick people out of their homes. Yes. That happened many times. It happened wi the pull town plan. Gm. John that was a neighborhood. Lots of people live there. Politicians said it will put an auto plant in there. And they kicked out dozens of people to make space. John what makes deterred worse than other cities . Its just the first. It is the first city to perience 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 incometax 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 highest 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 to the plan. Whats the snificance . Well, its been 8lane highway, but it might as well be a border between tto countries. Is the dividing line between detroit and the northern suburbs. Things politically, economically john rich and poor. Pretty much. Things on both side of the alliance and night and day difference. John the politicians 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 when small mentality has to stop. Nascar is about excitement. But tracking all the action and hearing everything from our marketing partners, the media and millions of fans on social media can be a challenge. Thats why we partnerewith hp to build the new nascar fan and media engagement center. Hps Technology Helps us turn millions of tweets, posts and stories into retime Business Insights that help nascar win with our fans. Announcer stop living with hair loss, that is. Losing yr hair is no fun and no one wants to be bald, but there is hope. Getting my hair back was the best thing that ever happened to me. Im happy with the way i look now. Im very excited about my hair. I feel beautiful. I love my hair. 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The fall of the big three did not help, but politicians made it worse, they squandered money. Detroits 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 llion 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. The toward show again become the great city that is its destiny. John 20 years later the mayor was still in Office Making similar promises. 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 bribes 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 governmen what happened to your town . Well, detroit turned into a oneparty town. For 50 years it was ruled by one party, which means that usually you get the stupid party. In detroits case there was no such cck. You get out of control speing 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 does cities 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 look 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 provision. John by Government Employees but things still run well. Well, when she wasalking 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 people. 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 yourast mayor was taken money for himself, kilpatrick. He used 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 bring all kinds of development to detroit at the same time as he was talking about the big game he was quietly siphoning the city coffers for money whic 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 tax breaks. 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. They like big, glarous 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 unlicensed maybe they should shut down. Well, bob licensed businesses are providing Vital Services today. These are businesses that theyre selling chief cheap tires, second and appliances. This is a city 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. Privatization, water the of a two . Well, transparency which is a big one. Gaithersburg, md. , has zero dead 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 lets 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 highest iome tax of any major city. After philadelphia and lewisville which are doing that great either. Detroit is in the worst shape. 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 zo. Will that work . Are will confront the politician who 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. Detroits elected politicians spent all the money. This spend billions more. Suppose to give detroit out of that mess without stripping workers of their pensions until care is not clear. Michigans former state majority leader. What will happen . The judge will push the reset button. It will be the largestity in america ever to go into bankruptcy, federal bankruptcy. Everybody, kern workers, carothers 47 separate public unions in the city of detroit. In fact, some of 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 federal judge. The emergency manager of the charge might not say this to anybody. I think he prefers to be 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 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 nd 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 in this 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 board paid 22,000 to send for trustees to why. This is at a time when the pension fund is headed for nkruptcy. Once again its up the pensioners fault. As the fault of people who are mismanaging the fun the fault 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. It was almost as if there were on remotecontrol model pilot, thinking someone would come in and bail them out over time. As we have sn in the promo to this segment of your story, 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 mey left. John thank you. Coming out, we will confront one of those toward politicians. Up next, a tour of detroits ruins. There was a dead body found over year. The boys used double miles from their capital one venture card to fly home for the big family reunion. You must be garths father . Hello. Mother. Mother traveling is easy with the venture card because you can fly any airline anytime. Two words. Double miles