Detroit is one of many taxing entities that are bankrupt. They have too many obligations and not nearly enough revenue to cover the bills.
How did this happen? They - like too many cities - continuously increased wages, retirement benefits and marginalized the reason they were created to continue their incompetent agenda. When the blight, crime, taxes and lack of jobs in the private sector caused businesses to close, or move, property values plummeted, tax revenue disappeared and the costs continued to climb.
The outcome of the bankruptcy - if they are not allowed to reorganize - will leave no options but to liquidate assets and the dispersing of what funds are available to creditors. If they're allowed to reorganize, all creditors will be offered a plan, which usually means around a 10% recovery of their losses at best. It may be worse, with creditors allowed substantially less.
How about the pensions? That's where people will really get screwed. If the funds weren't secured, some may find their pensions don't exist. That's sobering to an older person living on a fixed income. Regardless of how they reached that point, the pain of losing money in this economy will be substantial. People will be hurt and those that caused this pain are probably long gone. Their legacy of waste will only be a talking point. There will be no accountability.
Meanwhile, other cities will follow. Corrupt, incompetent government entities abound in the United States. How this all ends up will only be known after it's all over. I have the feeling many cities will be turned into landscapes of empty decay; a testament to the folly of progressive thought, poor federal monetary policy, deficit spending and the corruption of ethics.
In Case You've Wondered
My blog is where my wandering thoughts are interspersed with stuff I made up. So, if while reading you find yourself confused about the context, don't feel alone. I get confused, too.
If you're here for the stories, I started another blog: scratchingforchange.blogspot.com
One other thing: sometimes I write words you refuse to use in front of children, or polite company, unless you have a flat tire, or hit your thumb with a hammer.
I don't use them to offend; I use them to embellish.