It’s bad enough that a bailout would be patently unfair to taxpayers who aren’t at fault in Detroit’s failure to govern itself, but the city itself would learn nothing. The bad behavior that led it to this point would go uncorrected.
What would other cities that are dealing with some of the same fiscal problems conclude from seeing Washington step in to “rescue” Detroit? That the solution to their problems lies in putting their financial woes in Uncle Sam’s hands? What about union leaders across the country who already have been agitating for higher taxes?
The solution is not a bailout. It’s bankruptcy.
Ed Feulner is founder of the Heritage Foundation (heritage.org).