The floundering city of Detroit, once the shining beacon of the nation’s manufacturing sector (and now the best example of Rust Belt collapse), has filed for bankruptcy. Simply put, there was nothing that the emergency manager could do to stave off total and complete disaster:
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.
Cities, like companies, need to be allowed to pay for the poor management decisions they’ve made. In Detroit’s case, that means bankruptcy, and it’s far a better solution than using state or federal funds to bail out the dying Michigan metropolis. Governor Rick Snyder had this to say:
“I know many will see this as a low point in the city’s history,” he wrote. “If so, I think it will also be the foundation of the city’s future — a statement I cannot make in confidence absent giving the city a chance for a fresh start, without burdens of debt it cannot hope to fully pay.”
It will take fresh leadership for Detroit to rebound, yet city residents continue to give the reins of power to failed Democrat politicians with no hope of reforming the Motor City. It’s unfortunate that we’ve come to this point, but other options would’ve been worse.