michigan - Blog - REO Pro Network

Long written off by many, Detroit is becoming an interesting city to watch from an urban revitalization perspective. At the core of these developments is the emergence of a startup ecosystem where (for the most part) one did not previously exist. While still early, the progress made in this area over the last several years has been impressive and is having an impact on the region. As an outsider looking in with experience in other entrepreneurial hubs, I wanted to share thoughts on conditions and trends coming together that may help elevate this into a more viable and sustainable model for the city going forward.

I grew up in the Detroit area in the 1970s and 80s. While officially in the suburbs, our house was only two blocks from the city border, bringing the city a bit more upfront in our personal lives. During high school and college, I also worked at the old Tiger Stadium, which afforded the opportunity to experience the city even further.

It was a tough time for Detroit, coming off the riots from the late 1960s and the accompanying exodus of hundreds of thousands of residents. Those challenges continued well after I had left, with the downsizing of the automotive industry, a shrinking tax base, and too much mismanagement and corruption at a local government level.

After graduating from college, I left the area for a programming job in another state. While I continue to spend time in Ann Arbor, I’ve spent little in downtown Detroit over the last 25 years. Still, with family and friends in southeastern Michigan, I have watched it from afar with interest over the years. More recently I’ve been intrigued to

watch the rise of the startup community in the region. To be honest, I did not give it a lot of real hope considering the multitude of challenges facing the city.

Sometimes when you’re down, the only way is up. But the story goes much beyond that here. Despite the potential for municipal bankruptcy currently hanging over the city, there are good things happening in Motown. The recent TechCrunch profile of Dan Gilbert does a great job outlining some of them. The region is taking steps and riding some key trends that are starting to effect change. From an outsider’s perspective with some familiarity with the region, here are some of the key ones that are driving (at least for me) a more optimistic view of the city’s trajectory:

We have seen what happened to many American families when year-after-year they had income of say only $40,000 and borrowed $20,000, so as to spend $60,000 each year. After just 5 years the families were each in debt well over $100,000. In one way or another, the banks bought their debt, allowing the families to continue their poor financial management habits; but it was not long before families could not maintain, the banks foreclosed, and the families lost their homes and filed for bankruptcy.

It will not be long before the United States of America will face something similar… a form of foreclosure and bankruptcy, as China forecloses on the debt America owes China. In other words, US citizens (you and me) are in debt to China (the bank), and China may someday have no choice but to take our “house” (the entire country.)

What will the USA be like when China takes possession of our country? Showing a high level of moral integrity, will American leaders do the right thing and simply “give up the keys” and turn over control of our “house”, the country? Or, will U.S. leaders choose instead to fight China in a war to avoid America’s responsibility, and ultimately destroy the “house” (our country)? Sounds like what many homeowners did before the bank took possession of their houses.

Can we avoid the loss of our country to China? Yes! We Can!

By cutting every local, State, and Federal budget by 50%, and fixing the annual budgets at that level for at least ten years; then simultaneously, beginning a 30-year fully-amortizing monthly payment to China so as to eliminate the debt. Also, at the same time, by raising the Federal personal income tax rate to 50% of gross income over $25.000 for each and every adult U.S. resident, retired or actively working. For non-living entities, the 50% tax rate would be applied to their net operating incomes. The Federal government would then provide population-based revenue-sharing to each State, offset by what the Feds provides directly to each local government. All State and local income taxes would then be eliminated. Finally, Federal revenue surpluses would, likewise, be allocated to the States.

What about tax write-offs? Other than non-living entity operational expenses, there would be none. In fact, what good is a tax write-off when you have no income? Under this plan, every government expenditure gets cut in half; but the Federal government, through the States and local governments, could create more jobs and a little fairer personal income distribution throughout the nation.

By the end of each 10 year period, a census and other economic studies would be performed by the Federal government and effective adjustments made to the plan accordingly.

Submitted by a member of the “Coffee & Tea Club”

michigan (2)

Hope in Detroit: An Outsider on Motown’s Entrepreneurial Renaissance

The 50-50 Compromise: Cut All Budgets By 50%… Federal, States, and Locals!

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