Detroit edges toward brink of bankruptcy

Updated

Once the heart of the nation’s thriving automobile industry, Detroit now faces bankruptcy unlike any other fiscal crisis hitting a municipality in American history. Michigan’s largest city currently owes creditors between $16 and $18 billion, with the prospect of facing bankruptcy as early as this month.

“To be honest with you…this week is pretty crucial,” Detroit Emergency Manager Kevyn Orr told the Detroit Free Press on Monday when asked whether or not the city would file for Chapter 9 bankruptcy. He is attempting to re-negotiate lower interest rates and concessions among its debt holders.

Detroit was once the fifth largest city in the United States, but its population has since plummeted to just over 700,000 people—a 25% drop since 2000. During that same time period, the unemployment rate has has risen from 7.3% 18.6%. With fewer people living in the city to contribute tax revenue, city services continue to slump.

“The less the city spends on basic services, the less people want to live in Detroit,” msnbc host Chris Hayes said Tuesday.

The streets are even too dangerous to traverse, with 40% of traffic lights out of commission. And most alarming – it takes an average of 58 minutes for the Detroit police to respond to calls for “the highest-priority crimes,” reports the New York Times.

“One of the critical issues facing the city in terms of the long-term needs of our residents—who are clearly the priority—they must have services,” Detroit City Councilwoman Joann Watson said Tuesday. “They deserve it.”

Detroit edges toward brink of bankruptcy

Updated