DETROIT
INDIVIDUAL
COMPONENT
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President William R. Harvey in a speech he gave on leadership stressed the importance of
fiscal conservatism or as he described it, “You can’t go to the store with one dollar and get one
dollar and fifty cents worth of stuff”. This ideology is generally true; however, with the
advancement of technology and resources to include credit and debt management a responsible
budgeter might be able to spent slightly outside of their means. There are a few keys phrases to
remember from the previous statements: responsible budgeter, might be able, and slightly
outside. Unfortunately, no one relayed this information to certain cities that shall go unnamed.
Detroit is the largest city in the Midwestern state of Michigan and was founded on July 24, 1701
that is prior to the founding of the United States of America. The point is that it is old and with
age comes wisdom as well as history. In the History of Detroit is the raise and fall of the auto
industry, when that fell the city fell with it and they both fell hard. The city of Detroit is in the
economic position that it is in now because, it fails to generate revenue, spends outside of its’
means, and doesn’t invest in its’ own people; however, the company that I have created will turn
the city around
One economic debacle for the city of Detroit is the failure to generate revenue to found
the city. In a recent fiscal report Detroit generated (in thousands) $1,415,980 from governmental
activities. In comparison, in that same year, Boston a city of slightly less population and a
physical size of about half, generated (in thousands) $ 3,083, 674 from governmental activities.
This comparison shows how drastically Detroit is underperforming at an essential point for
sustainability. The main reason for the lack of revenue is the absence of big business. It is no
secret that the economy of Detroit was centered around the auto industry that is not only for the
jobs they created but also for the taxes they paid. Property taxes paid by big industrial
corporations is what was used to fund everything else and help sustain the city the lack of these
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taxes directly correlate to the lack of revenue in the city which then leads to a snowball effect for
the city. When large industrial corporations left cities like Detroit they took their tax paying,
revenue building dollars with them and that failure to generate that revenue from other sources is
one of the economic plagues of Detroit.
Another economic debacle for the city of Detroit is the need to spend outside of its’
means. In the most recent financial report Detroit government revenue decreased to (in
thousands) $1,318,739. The government expenses for that same period (in thousands) totaled
$1,320,045. That is (in thousands) a $1,307 or about $1.3b deficiency in that period alone. At the
same time that big industrial corporations were leaving the city the jobs began to leave with
them. When the jobs left the poverty rate increased rapidly and the demand for public services
such as unemployment, and food stamps increased. This is the snowball affect previously
