Detroit declared bankruptcy a couple of weeks ago, and the headlines were lousy with it. Although this is a major problem, it now seems to have been relegated to the back pages. What is your take on what Detroit means for the rest of the country?
The only people surprised by Detroit’s bankruptcy were city employees and pensioners, and they shouldn’t have been. This has been a slow motion train wreck for a very long period of time. After all, how can a municipality lose 60 percent of its residents, an even greater percent of its tax base, and keep making ends meet? Obviously, it can’t.
What happens next is a question of real concern. Do Michigan or Washington step up to the plate and guarantee the city’s pension and health care systems? I think it’s pretty safe to say Ann Arbor isn’t in a huge hurry to do it, as Detroit was in hock to its various benefit programs to the tune of $9 billion.
Read the full article as previously published in the Montgomery Advertiser Aug 2 2013
The opinions expressed within this report are those of John Norris as of the initial publication of this blog. They are subject to change without notice, and do not necessarily reflect the views of Oakworth Capital Bank, its directors, shareholders, and employees.