WASHINGTON — After at least a year of negotiation and intense scrutiny, the famous Motor City of Detroit has declared bankruptcy.
Detroit is now the largest U.S. city to declare bankruptcy in American history. As we at AIM reported, there have been multiple efforts on part of the city and Michigan Governor Rick Snyder’s office to reconcile the large debt burden of Detroit, but it did not amount to any significant progress.
The Detroit Free-Press ran today’s paper with the headline, “Detroit Files for Bankruptcy” and “A Chance for a Fresh Start”.
Gov. Snyder appointed an emergency city manager and a managerial team to take a closer look at the city’s finances, which had created a debt that ballooned to between $18 and $20 billion as the New York Times reported. Some say that it means that each Detroit resident could owe around $13,000 if the debt is broken up among individual taxpayers and residents.
The New York Times quoted a local city worker as saying, “This has been coming for ages.”
Years of corrupt governance by Democrats, bloated pensions, flight of taxpayers and declining tax revenue have destroyed the once-powerful Motor City.
In trying to avoid bankruptcy, Snyder’s appointed city manager Kevyn Orr (who was a former D.C. bankruptcy lawyer) tried to get public employees to cut their pensions and get investors in municipal bonds to take a loss on their bonds, both of whom rejected Orr’s last-ditch efforts.
At least one former Detroit mayor, Kwame Kilpatrick, is under investigation for corruption and graft while the city has fallen apart. Yet the liberal media and the left blame Mitt Romney for his 2008 op-ed that calls for letting Detroit go bankrupt but they do not criticize Democrat policies that have gutted the city and ballooned its debt.
As the Washington Post reported, only 700,000 Detroit residents remain from the peak of almost 2 million in the 1950s. Detroit’s crime is untenable and was one of the only American cities that saw an increase in its murder rate, with police response times averaging at about an hour. Also, 40% of the streetlights do not work, the jobless rate is at 18% (which is double the national average) and 80,000 buildings are abandoned and blighted.
The other largest city to go bankrupt was in Alabama, where Jefferson County declared bankruptcy and whose boundaries include the city of Birmingham. The county had $4.2 billion in debt, much smaller than Detroit’s $18 billion plus debt.