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View Diary: Detroit files for bankruptcy, heightening uncertainty for residents, workers, and retirees (80 comments)

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  •  Strictly speaking it's not all debt... (1+ / 0-)
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    Debt would be bonds issued on the market.

    It's money that's owed to various pension funds.

    And when it was originally incurred (ie: contracts negotiated in the 50s) Detroit was a roughly 2 million population, well-above-average-income, city. The Mayor was more important then all but a handful of Governors.

    The problem is that the city that owes that money is currently 700k or so people, almost all of them can't afford to eat from their own budgets (the $14k per capita income is 130-140% of poverty), which means very few of them actually pay the taxes owed, and that further enforcement is generally a) cruel, and b) not cost effective (tracking down a guy who is only reachable by cell phone ain't cheap).

    Kwame's misrule did not help, but it basically speeded up the inevitable.

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