Detroit files for bankruptcy--largest filing in US history

http://www.usatoday.com/story/news/n...

DETROIT -- The city of Detroit filed for Chapter 9 bankruptcy protection in federal court Thursday, laying the groundwork for a historic effort to bail out a city that is sinking under billions of dollars in debt and decades of mismanagement, population flight and loss of tax revenue.

Ouch. I guess the writing has been on the wall for some time, but still, wow. What happens next? Robocop?

It should have happened this year, if not a few years ago. But like many who seek to avoid bankruptcy, they merely limped along bleeding out until matters were much worse. None of the elected officials, none of the unions were entering into the Emergency Financial Manager situation with good faith. Corruption and graft was still alive and well, and the city was taking much of the state down.

Reorganize the contracts, get rid of all the dead bureaucratic weight, and let's move on. In the mean time I hope that the legislators and governor keep the state on the path to eliminating a lot of the senseless local controls that got Detroit, Flint, Pontiac, and Lansing into this crisis in the first place. Local politics should never be a career, it should be service.

KingGorilla wrote:

It should have happened this year, if not a few years ago. But like many who seek to avoid bankruptcy, they merely limped along bleeding out until matters were much worse. None of the elected officials, none of the unions were entering into the Emergency Financial Manager situation with good faith. Corruption and graft was still alive and well, and the city was taking much of the state down.

Reorganize the contracts, get rid of all the dead bureaucratic weight, and let's move on. In the mean time I hope that the legislators and governor keep the state on the path to eliminating a lot of the senseless local controls that got Detroit, Flint, Pontiac, and Lansing into this crisis in the first place. Local politics should never be a career, it should be service.

Yep. To all of this. Honestly this should have happened at least a year ago.

My only concern is that the tour of Lost Detroit last week was a cover for setting up secret sales of the few assets in Detroit owned by taxpayers that are actually worth money.

Every time I visit Pittsburgh, I hurt for what Detroit could become. This is a good step.

Definitely needed to happen. My worry though is that they'll liquidate some cultural assets; there were some rumors of selling off the DIA's collection, which would add more sadness to an already sad situation.

The DIA is principally a loaned collection, which is good for them. It also speaks to the philanthropy still in the area. The good news is that in Chapter 9, unlike Chapter 7 this is not a full liquidation and the city's creditors cannot force any asset to be sold off to satisfy debts.

Couldn't we just deed Detroit to Canada?

Detroit's a popular punching bag, and has been for the last couple decades, but it's not beyond saving and it remains one of the greatest cities in the country.

A bankruptcy might go a long way toward putting Detroit on a path similar to Pittsburgh or Baltimore.

For sure, Detroit can be great again, especially with the amount of investment being put into Downtown right now. This was buried by the bankruptcy news yesterday, but Dan Gilbert offered to buy out the fail jail and adjacent sites from Wayne County -- a huge chunk of Downtown that he doesn't own. Hopefully all this private investment will bring people Downtown and provide some much needed tax monies for the city in the coming years.

There is a 7 mile core of Detroit that is doing pretty well. Maybe they should give up the stuff just outside the area to reduce costs (reverse-annex?).

http://www.npr.org/2013/07/11/201200...

Edwin wrote:

There is a 7 mile core of Detroit that is doing pretty well. Maybe they should give up the stuff just outside the area to reduce costs (reverse-annex?).

http://www.npr.org/2013/07/11/201200...

That's my thought. Detroit is about half the population it was 30 years ago, yet still has all the land. Public services are trying to maintain a city of over a million on the tax base of under 700 thousand. There are neighborhood that are 90% abandoned that police and fire are still required to respond to.

Shrink the city to its core and grow it from there.

Agreed, the reduced tax base is what makes most conventional solutions untenable.

But how do you shrink a city? Could you create a new governmental entity and then have that entity annex whatever contiguous land area would no longer be part of Detroit?

ringsnort wrote:

Agreed, the reduced tax base is what makes most conventional solutions untenable.

But how do you shrink a city? Could you create a new governmental entity and then have that entity annex whatever contiguous land area would no longer be part of Detroit?

That's a pretty ambitious step. Might be easier just to rezone a sh*tload of property such that city services no longer go out there.

The political will to withstand the focused accusations of racism and gentrification this will inevitably cause -- or the lack of said political will -- is the reason why Detroit hasn't been able to fix itself.

I'm certainly no expert but I don't think it's possible to "zone away" the legal requirement for city services.

The point I'm driving at is this: I'm not completely certain the current body of local and state laws and ordinances provides the necessary framework to allow Detroit to fix itself.

Land trusts and urban farming might be a good start for them

Urban farming is a piece of the solution, but a small one overall. It's only recently become sustainable and is still quite a ways off from being profitable. Most urban farms are run on a volunteer basis.

I'm not slamming urban farms at all -- I think they're hugely important -- but it's not fair to expect miracles out of them. Yet.

Encouraging as much entrepreneurship, artistic leeway, and innovative ideas (like Edwin linked to earlier) would be a great start too.

Why do I have this sudden desire to watch Robocop?

NathanialG wrote:

Land trusts and urban farming might be a good start for them

Dare I dream? The opportunity is potentially there to do some revolutionary things. Unfortunately I don't know if the leadership and political will exists in the current climate.

Agent 86 wrote:

Why do I have this sudden desire to watch Robocop?

Detroit! Reorganize your finances or there will be ... trouble!

Wait, if they're not allowed to go bankrupt, then what's supposed to happen now?

Parallax Abstraction wrote:

Wait, if they're not allowed to go bankrupt, then what's supposed to happen now?

Well thank the gods that the city isn't going bankruptcy now, otherwise it would've turned into some kind of hellish, depopulated wasteland.

Maybe a large corporation will buy Detroit, take on its debt and establish itself as a sovereign nation. It'd be like a Vatican City inside the US. I mean, last year Walmart had revenue of about $469 billion so they could take the hit to establish their own country. That'd be much better than allowing Detroit to go bankrupt, right? So yeah, if they can't go bankrupt... then what? They just default on everything, have no credit, their bonds are worthless, all city services either dissolve or go private... yeah, that would be bad. Ancient Rome did the whole private fire departments thing and that didn't work out too well.

Kehama wrote:

Maybe a large corporation will buy Detroit, take on its debt and establish itself as a sovereign nation. It'd be like a Vatican City inside the US. I mean, last year Walmart had revenue of about $469 billion so they could take the hit to establish their own country. That'd be much better than allowing Detroit to go bankrupt, right? So yeah, if they can't go bankrupt... then what? They just default on everything, have no credit, their bonds are worthless, all city services either dissolve or go private... yeah, that would be bad. Ancient Rome did the whole private fire departments thing and that didn't work out too well.

It could instantly become Ron Paul's Libertarian Wunderland.

Paleocon wrote:
Kehama wrote:

Maybe a large corporation will buy Detroit, take on its debt and establish itself as a sovereign nation. It'd be like a Vatican City inside the US. I mean, last year Walmart had revenue of about $469 billion so they could take the hit to establish their own country. That'd be much better than allowing Detroit to go bankrupt, right? So yeah, if they can't go bankrupt... then what? They just default on everything, have no credit, their bonds are worthless, all city services either dissolve or go private... yeah, that would be bad. Ancient Rome did the whole private fire departments thing and that didn't work out too well.

It could instantly become Ron Paul's Libertarian Wunderland.

Oh I would buy tickets to this...

Chairman_Mao wrote:

Oh I would buy tickets to this...

From the safety of pay-per-view.

ringsnort wrote:
Chairman_Mao wrote:

Oh I would buy tickets to this...

From the safety of pay-per-view.

ensconced in your sky fortress.

Paleocon wrote:
ringsnort wrote:
Chairman_Mao wrote:

Oh I would buy tickets to this...

From the safety of pay-per-view.

ensconced in your sky fortress.

I say we divide Detroit into West and East, I'll set up a communist utopia in one while RP does his thing in the other, and we make a reality show of the whole thing.

Kehama wrote:

Maybe a large corporation will buy Detroit, take on its debt and establish itself as a sovereign nation. It'd be like a Vatican City inside the US. I mean, last year Walmart had revenue of about $469 billion so they could take the hit to establish their own country. That'd be much better than allowing Detroit to go bankrupt, right? So yeah, if they can't go bankrupt... then what? They just default on everything, have no credit, their bonds are worthless, all city services either dissolve or go private... yeah, that would be bad. Ancient Rome did the whole private fire departments thing and that didn't work out too well.

Hilariously, my wife had just suggested this to me literally seconds prior to reading this.