Detroit....

[nessmuck]

If Obama owned a city ...it would look like DETRIOT. What a shame....

[ReardenSteel]

Are you saying deficit spending is in fact not sustainable because the US government thinks otherwise.

[bill3152]

Eventually all debts will have to be paid. Debt is slavery. Every man woman and child in this country owes about $50k not including fed state and local govt unfunded obligations which are not included in the total debt figure. It is much higher.

[Johnus]

Just waiting to see if they Pay Off the Banks and screw their retirees.

Just like the Student Loans. We'll charge the banks less than a % with no problem . But we'll shaft the students.

[Pi3]

I really don't want to be a grammar-nazi here but... Is the typo voluntary? I'm just wondering because it does look like "debt-riot"...

Anyways, cheers.

[BobH]

It is a crying shame what happened to Detroit and lots of people are going to suffer. Retirees are very low on the list of creditors who have to be satisfied in bankruptcy cases. By low I mean I think they don't even rate in the first string. When in debt you can't spend your way to prosperity with money you don't have.

Bob

[bill3152]

Well the Harvard educated economists think you can and that's the only way by spending more. But I say that if you keep borrowing to spend and supplementing your lifestyle, it seems that all is well, but it only SEEMS that way. Reality is another matter.

[alexm]

Come on, guys. If you want to talk about debt politics, that's one issue, but that's not what killed Detroit. It's been a one-industry city for decades, and that industry hasn't exactly been thriving lately (2008, anyone?). More importantly, "Since 2000, Detroit’s population has declined 26 percent. There are now just 706,000 people in the city, way down from 1.85 million during its industrial heyday in 1950." So the city was built for a population more than twice as large as its current one - and that shrinking means that there is a lot of infrastructure & debts such as pension promises in place that can't be funded by the current tax base. It's pretty simple.


Detroit just filed for bankruptcy. Here’s how it got there.

[bill3152]

You aren't wrong. But a shrinking tax base means less $. So how do you handle that? Raising taxes on the reduced businesses there will only drive those businesses somewhere else. ANd it has so you end up with even less. And the cycle starts again. Less businesses are taxed more and more businesses leave. I hear what you are saying but whats the solution then? The pond has dried up and has been drying up for years. The city is shrinking and its at a boiling point economically. I don't have the answers. But more of the same hasn't worked either. The city will have to evolve into something that is more sustainable. I don't want to see people lose their pensions but anybody want to adopt a pensioner then? Its not their fault I know, but its not mine either.

[alexm]

The city will have to evolve into something that is more sustainable.

Yeah. I'm not sure what that is. Of course, bankruptcy will allow them to jettison some debt, but they're still left with too much infrastructure to support and property values so low that nobody bothers to pay their property tax. That's what I'm curious about - how do they resolve these structural issues? Beats me.