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Detroit City: The Road to Bankruptcy
Introduction
On September 18, 2013, residents of the city of Detroit, which had filed for bankruptcy protection, passionately expressed their views at the bankruptcy hearing. Sylvester Davis, a resident, said to Judge Steven Rhodes (Rhodes), “If you've got God in you, do the right thing. Disallow this mess.” Detroit city had filed for bankruptcy protection in July 2013 after failing to service more than $18 billion in long-term debt. In December 2013, Detroit became the first major city in the history of US to be declared bankrupt.... Detroit's descent into bankruptcy was neither sudden nor unanticipated. According to some experts, the city's financial decline started right in the 1960s, when its population began to fall. Decades of bad governance, corruption, financial mismanagement, and soaring crime levels only made matters worse. |
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In the second half of the 20th century and the first decade of the 21st century, the local administration made many attempts to revive the city's fortunes. However, these initiatives couldn't help the city avoid bankruptcy, as expenditure on pensions increased, tax revenues dwindled, and budget deficit widened.While the future of the city remained uncertain, many observers felt that the bankruptcy would at least allow Detroit to start with a clean state. "...
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