America seems in a state of denial about Detroit filing for bankruptcy. Many people think Motown is such an exceptional case that it holds few lessons for other places. What was once the country’s fourth-most-populous city grew rich thanks largely to a single industry. General Motors, Ford and Chrysler once made nearly all the cars sold in America; now, thanks to competition from foreign brands built in non-union states, they sell less than half. Detroit’s population has fallen by 60% since 1950. The murder rate is 11 times the national average. The previous mayor is in prison. Shrubs, weeds and raccoons have reclaimed empty neighbourhoods. The debts racked up when Detroit was big and rich are unpayable now that it is smaller and poor.
Other states and cities should pay heed, not because they might end up like Detroit next year, but because the city is a flashing warning light on America’s fiscal dashboard. Though some of its woes are unique, a crucial one is not. Many other state and city governments across America have made impossible-to-keep promises to do with pensions and health care. Detroit shows what can happen when leaders put off reforming the public sector for too long.
Read the full article here
Do you think we have something to learn from Detroit's bankruptcy ? Will other cities in America face similar fate ?.The article says that American cities and states should promise less or face disaster. What do you think.
i am confused by how this works. it almost reminds me of the enron situation, where hollow promises led to chapter 11. i think corporate america and the american government are mirror images in certain ways
ReplyDelete