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On July 18th, Detroit filed for bankruptcy, making it the biggest municipal default in American history. Contemporary observers of the city would be hard pressed to tell that it was once one of the fourth most populated cities in the country and produced three-quarters of America’s war machine in the Second World War. Detroit’s bankruptcy has been decades in the making, a consequence of political corruption, deindustrialization, globalization, “white flight,” and poor budgeting. Given that Detroit’s tenure in bankruptcy court will likely last until the end of 2014, if not beyond, extempers will face a host of questions this season about how Detroit got to this point, how it can fix its debt, whether the federal government should come the assistance of the beleaguered city, and what impact its bankruptcy may have on the rest of the United States, namely those cities who are approaching the same fiscal cliff that Detroit has already driven off of.
This brief will provide a brief overview of Detroit’s problems, how those problems are being addressed at present, and then discuss implications of its bankruptcy. Readers are also encouraged to use the links below and in the related R&D to bolster their files about this topic.