Detroit Files For Bankruptcy Protection

Detroit, the symbol of US industrial might, has become the biggest U.S. city to file for bankruptcy. Once the global headquarters of auto industry that was home to the Big Three (General Motors, Ford, and Chrysler), the city filed for bankruptcy protection after piling up a debt of $18.5 billion.

Detroit Files For Bankruptcy Protection

The famed city became the largest US municipality ever to go broke in seeking chapter 9 protection. The decline of Motown has been extensively chronicled since its decamped manufacturing prowess, initially to neighboring Canada and Mexico, and more recently to China and India. Unemployment rate is over 18% and only about 700,000 people live in Detroit today, less than half its 1950 population.

“They are facing a financial situation that has been brewing for decades,” Mike Lafaive, a public policy expert at a Michigan think-tank said describing the bankruptcy declaration as largely uncharted territory. “We haven’t seen the type of numbers we’re looking at in Detroit or anywhere else.”

Kevin Orr, a bankruptcy expert hired by the State in March to stop Detroit’s fiscal free-fall, said Detroit would continue paying its bills and employees.

Michigan’s Republican governor Rick Snyder says this is the best chance of Detroit to reinvent itself. I know many will see this as a low point in the city’s history,” Snyder wrote in a letter authorizing the bankruptcy filing. “If so, I think it will also be the foundation of the city’s future. Now is our opportunity to stop 60 years of decline.”

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