Top Ranked reasons why detroit went bankrupt by zankrank (View Consensus)
1. detroit is sagging under decades of bad governance detroit is sagging under decades of bad governance
“The city’s operations have become dysfunctional and wasteful after years of budgetary restrictions, mismanagement, crippling operational practices and, in some cases, indifference or corruption,” Orr wrote in May. “Outdated policies, work practices, procedures and systems must be improved consistent with best practices of 21st-century government.”
2. since 2000, detroit’s population has declined 26 percent
There are now just 706,000 people in the city, way down from 1.85 million during its industrial heyday in 1950.
3. the official unemployment is now 18.6 percent
and city policies aren''t helping to bring in any new businesses that promote jobs.
4. high crime and blight are driving even more residents out of the city
It’s also driving down property values, which means many residents have stopped paying property taxes. The city collected about 68 percent of the property taxes owed in 2011. Both of those things put a further strain on Detroit’s finances.
5. meanwhile, detroit owes around $18.5 billion to its creditors
That includes about $6 billion in health-care and life insurance obligations, plus roughly $3.5 billion in pension costs racked up over the years. Given its ever-worsening economic slide, Detroit was in no position to pay off all its obligations.
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