Recovery: Detroit Goes Bankrupt, Largest Municipal Filing in U.S. History
July 19th, 2013Via: Washington Post:
Detroit filed the largest municipal bankruptcy in the nation’s history Thursday, marking a new low in a long decline that has left the U.S. automaking capital bleeding residents and revenue while rendering city services a mess.
The city, which was the nation’s fourth-largest in the 1950s, with nearly 2 million inhabitants, has seen its population plummet to 700,000 as residents fled rising crime and deteriorating basic services, taking their tax dollars with them.
In March, as Detroit faced an estimated debt of $19 billion, Michigan appointed an emergency manager vested with extraordinary powers to rewrite contracts and liquidate some of the city’s most valuable assets. That led to once-unthinkable proposals such as forcing public employees to cut their retirement benefits or demanding that investors in municipal bonds — long considered among the safest investments — take pennies on the dollars they lent to Detroit. In recent days, both of those groups objected, propelling the city to file for bankruptcy.
