I was originally going to copy the article here, but it's way too damn long. So I'll touch on a few points. The main gist of the article is that there are a lot of factors involved in the spiral of Detroit, everything from suburbanization and redlining practices encouraging white flight while forcing blacks to stay in urban areas, to the decline of the auto industry, to high public employee legacy costs (though in this case it's more to do with number of employees versus cost per employee). But the main reason the article states is the cause for Detroit's bankruptcy, and becomes apparent as you read the article, is the large borrowing under mayors Kwame Kilpatrick and Dave Bing starting in the 2000's. Up until that point, bankruptcy was avoidable, but after massive increases in borrowing (lauded by Wall Street as financially sensible), the payments were no longer tenable. More at the link. http://www.freep.com/article/201309...-Bankruptcy-history-1950-debt-pension-revenue
The underlying theme behind nearly every cause explored by the article is city leaders' repeated refusal to acknowledge reality. Not enough money? Tax and borrow, tax and borrow, tax and borrow. Because looking at expenses is politically untenable.
I have said it before and I will continue to say it: Detroit was, to a great extent, an artificial city -- or at least an artificially expanded city -- due to the automotive industry. The automotive industry became a big thing there because Henry Ford happened to live there. End of story. But as the automotive industry diversified -- which was bound to happen, although wage gouging by unions was one of the factors that accelerated it, but Detroit's climate and the fact that it is situation on a peninsula didn't help, either -- the city was bound to lose both financial importance and, shortly thereafter, population. That was something that successive city governments would neither accept nor believe. They thought this was just "a difficult period," that things would get better, that new industries would develop... It wasn't going to happen, and they should have known it. All the borrowing they did was based on the premise that the city would continue to take in tax revenues equal to or greater than what they had before. But as population declined and average income of those left declined as well, the inability to pay was inevitable. Detroit should be a city of 50 to 100 thousand people, as part of a suburban area of no more than a quarter of a million people. Michigan should be basically an agricultural state, with tourism as a second economic activity. Michigan as a major industrial state was a fluke of history, because Henry Ford happened to be from Dearborn, but it was bound to happen that, within a very few generations, the state as a whole and the Detroit area in particular would return to its natural predisposition. It's like when the copper mining boom in the north ended. It's hard to believe that Calumet was one of the major contenders for becoming capital of the state, and that the reason is that it was the biggest city in the state. Calumet today is a lost village. Detroit will never be a "lost village," because of its position on the straight between the Great Lakes (hence the name of the place, for those who know French), but it cannot continue to be one of the major cities in the whole country. The sooner the city planners realize that and start taking it into account, the better.
I always thought from what I've heard over the years (since the early 1980s) was that city and civic leaders in Detroit were very much caught in a fantasy for decades that somehow there would be a big resurgence in the U.S. domestic auto industry that carried Detroit back to solvency. IIRC, a Detroit local politician was once said to have literally shrugged his shoulders and said "It doesn't matter. If the car industry doesn't grow, the city can't be saved no matter what".
1. Its revenue generating industries disappeared. 2. Unions and politicians refused to scale back their demands and adjust their policies accordingly. Or; 1. No more money. 2. No less greed.
