Its so cold in the D

[kotton05]

Can anyone explain this thing with all of Detroit filing bankruptcy? I don't get how a whole city can do that...

[Tanthallas]

Its rough on the streets

[Malice_Mizer]

IT'S LIKE ... FUCKIN' LABOR UNIONS, MAN ... LIKE ... DESTROYING AMERICA ... DESTROYING US...

[Gaffin Deeppockets]

http://www.youtube.com/watch?v=aktLRiWXfqg

[Frieza_Prexus]

A city exists as a legal entity known as a municipality. Much like a corporation exists legally. It's really no different. Municipalities file for bankruptcy under chapter 9 of the bankruptcy code within the United States Code Title 11. Much in the way that you as a person could file for bankruptcy under chapter 7. The different chapters are merely different types depending on who you are, how much you owe, and whether or not you're looking to be absolved of your debt completely or if you are willing to commit to a repayment plan.

Detroit is filing for bankruptcy because it is insolvent meaning that it cannot pay its debts as they come due. There is some debate as to why this is the case, but most commentators generally believe that Detroit is really shitty with money. Specifically, Detroit has a lot of unions that it has entitled to numerous benefits that the city must pay according to law. This includes a lot of pensions for government employees that have since retired.

Detroit financed most of the obligations by using tax revenues which were historically very high when the city was the base of the American auto industry. Since the private manufacturing has dried up for a number of reasons, Detroit has experienced massive budget shortfalls and cannot pay the obligations it incurred over the last 5 or so decades.

Also, their mayors are almost always incompetent criminals some of which are in jail right now for corruption.

[Malice_Mizer]

The historical run down of the economic situation in Detroit:

Black people started getting political control in the 70's with Coleman Young (elected first black mayor in 1974). White business owners fled the city for the suburbs, partly due to racialized fear of, "Well, there goes my city," partly due to a progressive agenda of these leaders to help the destitute poor that had been neglected for years. Detroit is left with a hollow victory for black leadership, as a vast majority of the economic power is now out of the city limits. Suburbs of Detroit are doing exceptionally well. The city itself is a fucking warzone.

Many cities have a similar story.

[Tanthallas]

Originally Posted by Frieza_Prexus [You must be logged in to view images. Log in or Register.]

A city exists as a legal entity known as a municipality. Much like a corporation exists legally. It's really no different. Municipalities file for bankruptcy under chapter 9 of the bankruptcy code within the United States Code Title 11. Much in the way that you as a person could file for bankruptcy under chapter 7. The different chapters are merely different types depending on who you are, how much you owe, and whether or not you're looking to be absolved of your debt completely or if you are willing to commit to a repayment plan.

Detroit is filing for bankruptcy because it is insolvent meaning that it cannot pay its debts as they come due. There is some debate as to why this is the case, but most commentators generally believe that Detroit is really shitty with money. Specifically, Detroit has a lot of unions that it has entitled to numerous benefits that the city must pay according to law. This includes a lot of pensions for government employees that have since retired.

Detroit financed most of the obligations by using tax revenues which were historically very high when the city was the base of the American auto industry. Since the private manufacturing has dried up for a number of reasons, Detroit has experienced massive budget shortfalls and cannot pay the obligations it incurred over the last 5 or so decades.

Also, their mayors are almost always incompetent criminals some of which are in jail right now for corruption.

...

[r00t]

It almost happened to a town called Fallbrook in socal. For awhile there was no police so if you didn't own a gun any old Trayvon could rape your wife and steal your car. Now they're San Diego's lil bitch tho

[Tiddlywinks]

Unemployment = no income.
No income = no taxs/people leave.
People leave = less possible taxs to collect.
Less taxes = less services.
Less services = people leave.


Meanwhile the city still had pensions and other obligations it owes from when there WERE a lot of people there.

Lots of obligations + mismanaged money + low taxes = bankruptcy.

It's a vicious cycle, and Detroit will not be the last to go through it. The entire country needs a good rightsizing at some point.

[Tiddlywinks]

Also, Urban sprawl on the services that are there. Makes for higher expenses.