Once the very symbol of American industrial might, Detroit became the biggest U.S. city to file for bankruptcy Thursday, its finances ravaged and its neighbourhoods hollowed out by a long, slow decline in population and auto manufacturing.
The filing, which had been feared for months, put the city on an uncertain path that could mean laying off municipal employees, selling off assets, raising fees and scaling back basic services such as trash collection and snow plowing, which have already been slashed.
“Only one feasible path offers a way out,” Gov. Rick Snyder said in a letter approving the move.
The city of Detroit, like the auto industry itself, saw financial ruin coming 20 to 30 years ago and could have taken steps to survival. But instead, both entities continued to act like the money could never run out, and continued totally unsustainable spending on salaries, benefits and services.
Get ready Chicago. You’re next.
I grew up in a Detroit suburb, and moved out of Michigan in 1985. Even in the late 70’s, early 80’s there were endless blocks of empty homes, rubble, crime, and arson. However, the road to financial ruin started with the reign (nearly 20 years in office) of Mayor Coleman Young. Major Young increased the public union power – as population declined the number of city workers did not. There was absolutely no reason for middle class whites to move back into the city limits, nor for middle class blacks to stay.
With unions come pensions, but paying for them with so many recipients living longer and a declining tax base is a definite problem. It will be perhaps prophetic of the situations in other citys and whole states like California to see how this plays out.