Detroit Wants To Shrink Itself, What Do You Think?

Detroit has been in a population decline for decades and decades.  Simply put, the city is now too big for itself.

The new mayor has proposed shrinking the footprint of Detroit by identifying areas which are currently sparsely populated, and relocating these residents to other areas.  The goal would be to create denser neighborhoods, which could then receive the concentration of services.

Right now, the city just can’t sustain itself.  The city once had about 2,000,000 residents, and now has less than half that.  Still, police must patrol all areas. Roads must be maintained.  Garbage pickup still has to cover all areas.

But with the population decline, the city can’t afford to offer these services across the board.  It is simply unsustainable.

It’s going to be a long road ahead if the city does move forward with this.  I’m not sure that it can actually succeed, but it’s a unique approach to a problem that has been around for decades and doesn’t seem to show any signs of ending soon.

Many of us have looked at our finances and taken measures to simplify them.  We cut out ‘lattes’, we eliminate or reduce debt, we cut spending where we can.  It’s interesting to see a city actually try to do such a thing on such a grand scale.

I know many people across the country see Detroit as a hellhole, and there are areas where this is indeed the case.  Still, the city and the surrounding area are full of good people, hard workers, great landmarks, and as one of the residents of the surrounding area, I continually hope that Detroit can someday right the ship.

It often looks bleak but when I look at the fact that many people and families have turned their own situations around, it gives me hope.

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Do These Things Worry Me? You Bet!

Saving Money Today had a link to a great article about seven things that worry the middle class.  Click here to read the post. 

I thought this was great and thought I’d comment on how I feel about each of these worrisome things, since I consider our family in the middle class:

  1. Falling Income – Last year our company gave no raises and they also cut the match to our 401(k) plan.  Both of these were presented as temporary, but just how long this temporary situation lasts is anybody’s guess.
  2. Reduced Savings / Net Worth – When we bought our home, the value had already dropped 15% or so from when the prior owners had purchased it.  We thought we had swooped in at the right time.  Unfortunately, the decline continued and it’s lost another 20% or so, pretty much erasing our down payment.  Although our net worth in non-home categories has increased, our overall net worth is lower than it was a few years ago because of the anchor that is real estate.  Luckily, we don’t have any plans to move nor do we consider our home an ‘asset’ in the sense of borrowing against it, but it’s still disheartening.
  3. Higher healthcare costs – These definitely worry me.  One upside from our employer is that we have pretty good healthcare, and the out-of-pocket cost increase from 2009 to 2010 was minimal.  Still, costs are increasing and with the new health care legislation, I can’t see this trend stopping anytime soon.
  4. Child Care / Elder Care expenses – My wife stays home with Baby Beagle, so we don’t have the child care costs yet.  Still, pre-school and other costs are bound to be expensive, and that will come up quick.  Our parents are in good health both medically and financially and I’m going to hold on to the thought that this will continue for a long, long time, so the elder care hasn’t come into play yet.
  5. College costs – This is certainly something we’re worried about.  We have started saving for Baby Beagle’s college fund, but if costs rise at the pace that they have for the last twenty years, it’s going to be pretty tough to imagine being able to pay for college at the current rate of savings, especially when you consider that we’d like to have a bigger family.
  6. Housing costs – We’re not moving so this isn’t a factor.  Still, you never know what might happen within a neighborhood or with a job situation, so this is something that could come up and become an issue in pretty quick time.
  7. False expectations – I’m well educated, motivated, and have been told that I’m good at what I do.  It used to be that these things would almost assure you a job and a good wage.  While I have both of those now, I know enough people and have read enough stories who have the same traits but are suffering.  It seems there are fewer and fewer opportunities and more people looking for them, and this wasn’ the way it used to be.

I am not so naive to think that generations before mine did not have the same concerns.  I think it’s natural to worry about money and finance related issues.  Still, I hope that our future allows for people to avoid being crippled by these and other worries.

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Easy Way To See If People Are Cutting Back

For those who work in the 9-5 office world, I thought of an easy way to check to see if people around you are cutting back:

Open your office refrigerator.

What you’ll find might surprise you. No, I’m not talking about the unidentifiable leftovers that have been there since 2006. I’m talking about just how many more people might be using it.

I’ve noticed in my office that when I go to take my lunch out, it’s been getting a little more crowded over time. I have no problem getting my lunch IN the fridge, because I’m usually the first one in the office in the morning. But, lately, I’ve noticed that getting it OUT is a bit more difficult.

Why?

Because people are skipping the lunches out and brown bagging it. So, there’s a lot of extra lunches to wade through from people that have added theirs throughout the day.

Of course, what goes along with that is more rotten fruit, old vegetables, half-eaten leftovers, and other unimaginable things that maybe once used to be food. What IS it about work refrigerators that make people create the most awful science experiments?

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Wall Street Meltdown: What The Government Should Do Next

After another brutal day on Wall Street, the question will surely be raised as to what the U.S. government should do next to try to stop the bleeding and the meltdown that is occurring day after day.
I think I have the answer. Are you ready for it? Here it is:
Absolutely nothing.
That’s right. Nothing. No more interest rate cuts. No more providing additional loans or credit to banks. No more bailing out insurance companies. No more promising to buy risky debt. Nothing. Zip. Nada. Zilch.
Why?
Because nothing they have done so far has worked. The government has tried tactic after tactic to try to calm the markets, but it isn’t working.
These investors that are hitting the panic button have it in their heads that they need to drive the market down day after day. No rate cut, bailout, insurance company rescue, or anything else seems to stop them from panicking. They’ve made that clear.
So, I say let’s just stop trying.
My opinion is that these ‘traders’ who are choosing to let hundreds of billions of dollars disappear from our economy every day are the equivalent of crying babies.
When a baby cries, you can do many things to try to make it stop crying. You can feed it. You can change its diaper. You can rock it. You can give it a pacifier or a rattle. Most times, these things or others will make the baby settle down and stop crying. But, not always. Sometimes a baby is just going to cry no matter what. In those cases, you have to make the decision at some point to just let the baby cry itself out until it’s done.
Basically, these traders driving the market down are the babies of our economy right now. The government has fed these babies (bailout), changed their poopy diapers (interest rate cut), given them their rattles (extended additional credit), and everything else that you provide to a crying baby.
But, these babies have made it clear that they just need their time right now to cry. And cry they will.
So, I say let them cry. Let these sellers bawl their little eyes out. Let them sell and think that they’re accomplishing something. Let them wail at the top of their lungs until they can’t wail anymore. Eventually, just like a baby, these sellers will tire themselves out. And they’ll quit crying.
Then, and only then, the government can get back involved. At that point, maybe the investors will appreciate the steps being taken to try to calm the waters. But for now, there’s no appreciation.
Only the sound of babies crying.

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