The junior Republican senator from Kentucky, Rand Paul, spoke at the Detroit Economic Club on Friday outlining his plan to help save Detroit from bankruptcy. Senator Paul was in Detroit to open a Michigan Republican Party outreach office. While speaking at the DEC, much of what Paul aired was revealed during a telephone press conference on Thursday. The plan is simple, to make Detroit a test case for what Rand Paul calls an ′economic free zone′. A 5% federal flay tax on corporations and individuals would replace the current income tax rates, along with a 0% capital gains tax rate. The objective is to encourage new business to Detroit, bringing jobs, jobs, jobs!
Earlier this week, U.S. federal bankruptcy Judge Steven Rhodes cleared the way for the City of Detroit to go forward with a Chapter 9 bankruptcy. The ruling allows the city to abandon its current pension obligations to former city workers and renegotiate existing contracts. The city′s union workers opposed this. The full extent of just how big a bite will be taken away from former employees has yet to be determined, but it could easily be as much as 70% or more.
Detroit, which once rivaled New York City in wealth, has been on a steady decline since the 1960s. The population has dwindled from over 2 million to less than 900,000. About 40% of residences are abandoned and many commercial properties lay dormant. The unemployment rate is listed at 17%, though some say it is much higher than that. The city′s tax base has eroded and is insufficient to handle its $18 Billion dollar debt. Some plans to pay off creditors include selling the city′s art treasures, estimated to be worth some $20 Billion dollars.
Kentucky Senator Rand Paul not only spoke about his economic free zone when he addressed the Detroit Economic Club, but also touched on other subjects. With Detroit′s public school system amongst the worst in the nation, Paul advocates for parents to have more choices through a voucher program. He also wants to improve residential occupancy with a homesteading plan. Rand Paul also touched upon his possible presidential run in 2016, saying that his wife has two votes on the matter and both are NO! Hah-Hah!