Tad DeHaven

With the City of Detroit heading toward bankruptcy, The Hill reports that Mayor Dave Bing has signed a $330,000 contract with a Washington lobbying firm to help the city grab more money from federal taxpayers. At the same time, Rep. Hansen Clarke (D-MI) wants up to a $1 billion in “emergency aid” (i.e., bailout) for Detroit from Uncle Sam.

I typed “federal funds Detroit” in a Google search and the following headlines popped up on the first page:

Cockrel: ‘Idiotic Management of Federal Funds Cost Needy Detroit Resident a Chance at Jobs

Detroit Poorly Managed Federal Funds

Detroit Could Lose $20 Million in Federal Funds Due to Mismanagement

State Seeks Better Oversight of Detroit’s Federal Funds

Officials Examining Detroit’s Finances Find Federal Funds Poorly Managed

As I clicked through the search pages a pattern emerged: most of the articles are either about Detroit receiving federal funds or Detroit mismanaging federal funds. And Mayor Bing and Rep. Clarke think the rest of the country should give Detroit more money?

Federal subsidies create a disincentive for local governments to prudently manage their financial affairs. Just like an unemployment check creates a disincentive for an unemployed worker to take a less desirable job that would at least get them back in the workforce, federal handouts allows local officials to avoid pursuing reforms that aren’t politically desirable in the short term, but that would be good for the city in the long-term. In short, Detroit ultimately has to be responsible for Detroit.


Tad DeHaven

Tad DeHaven is a budget analyst at the Cato Institute. Previously he was a deputy director of the Indiana Office of Management and Budget. DeHaven also worked as a budget policy advisor to Senators Jeff Sessions (R-AL) and Tom Coburn (R-OK).



TOWNHALL MEDIA GROUP