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Ned Staebler

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Could We 'Fix' Detroit With $800 Billion? Let's Try!

Posted: 01/20/12 02:26 PM ET

A few days before Christmas, with very little fanfare, the last U.S. combat troops in Iraq crossed back over the border into Kuwait. For the troops and their families it was a time of great celebration. There was a small official ceremony, but, certainly no one was hanging "Mission Accomplished" banners anywhere. For the most part, back home, the ending of the eight-plus-year war went pretty much unnoticed. I guess that was fitting, because for the most part, the war itself went pretty much unnoticed. We didn't raise taxes to pay for it. No war bonds. No rationing. No shared sacrifice. And, really, it was Christmas, after all. We were too busy doing our patriotic duty at the local mall.

In one of the few articles I saw about the end of the war, I noticed that the whole thing was estimated to have cost the U.S. $800 billion. I say "few articles" because of the lack of coverage it got. Don't believe me? Google "Iraq war ends" and look at the number of results. Then, try "Justin Bieber" or "Kim Kardashian" or even "honey badger." Scary, right? But, I digress.

So, the direct financial costs of the Iraq war were estimated to be about $800 billion, with a 'B.' That struck me as a lot of money. I started thinking: "What else could we have done with $800 billion over eight years?"

Well, there're the obvious ones -- don't borrow it from the Chinese in the first place, or borrow it from the Chinese to retire older debt with higher interest rates. Too boring? Okay.

For about $50 billion a year we could have provided health care to all of America's uninsured. With the remainder, we could have provided housing and services to the approximately 3.5 million Americans who experience homelessness during a given year. How about schools? Roads? Bridges? Mass transit? I could go on and on and on.

But, if we had a burning desire to use that money as an investment in our future? Why not spend it rebuilding one of America's great cities? What could we have done with that money in Detroit?

Let's assume that we couldn't convince Washington to spend the whole lot in Detroit -- unless we pretended to have weapons of mass destruction, that is. So, we'd have to share it. Maybe we could have gotten them to pick 10 cities and split it up in a new American urban Marshall Plan. That's still $80 billion apiece. I could live with that. But, what if we just had to spread it back out to the states evenly? That's not very intuitive given the wide population disparities, but I could see it happening to get it passed the Senate. So, we end up with a paltry $16 billion over eight years. I'll take it.

Now, the big jump is to get it all spent in Detroit. Since it's my blog post, I'm going to use my prerogative to say that the federal money came to the states with the caveat that it had to be spent in cities with a population of more than 500,000 or the largest city in the state, if a state doesn't have a city that big. OK, hurdle cleared.

So what should we do with our $16 billion? I'll get us started. Obviously I'm rounding and oversimplifying, but you get my point. Here are some things we could have done:

• Build the Woodward Light Rail from Downtown to 8 Mile - Cost: $500 million. That leaves plenty for an endowment for operating subsidy. Heck that leaves plenty to take the thing all the way to Pontiac. Why not add a spur up Gratiot, Grand River?

• Pay off the City of Detroit's outstanding debt obligations - Cost: $1.8 billion. This would save the city $145 million a year in interest payments and eliminate a big chunk of its structural deficit.

• Pay for the costs of the Cobo renovations - Cost: $300 million. Imagine if we could have kept the Auto Show without all of the handwringing and political grandstanding that paralyzed cooperation in the region for what seemed like an eternity.

• Shore up the Detroit Water and Sewer system's maintenance issues for the next 30 years - Cost: $4 billion. A 2001 SEMCOG study called for $135 million a year for the next 30 years to help plug a shortfall in the $15-$25 billion through 2030 needed to address the aging sewer infrastructure that serves over 4 million people in Southeast Michigan. I'll put my money in up front!

New hockey arena - Cost: $350-400 million. I love the Joe, but it's time for a new stadium...

Gap funding for new housing developments in the city. Cost $1 billion. A pot of money this large, if only used to fill equity gaps for developers (not to pay for projects entirely) would leverage tens of billions of outside financing and transform parts of the city.

• Reopen the Belle Isle Aquarium, Detroit Science Center, etc. - Cost: depends. The aquarium lost about $400,000 a year and the Science Center was $5.8 million in the hole. Surely $50 million would reopen them both and provide an endowment to cover operating shortfalls. Throw in another $250 million and we've got an endowment to cover the Detroit Zoo millage and one for the DIA.

Clearly this isn't a complete list. That's OK. I only used about half of the money! How about a new bridge to Canada? Reopen, restore, and maintain all of our city parks? No more potholes? More teachers, new books, better schools? High speed rail to Chicago?

I've spent about $8 billion above (it's my post, I can do what I like), but there's $8 billion to go. In the comments, tell me what you'd like to spend it on.

 

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