A Picture of Collapse: Detroit on the Verge of Bankruptcy

Debt-ridden Motown on the brink of bankruptcy

DETROIT was the metropolis that enabled the American dream of "a chicken in every pot and a car in every garage". Now the Motor City is three weeks away from bankruptcy.

The Australian,

5 April, 2012

With the city crippled by debts of more than $US12 billion and an ever-shrinking population, Michigan governor Rick Snyder must decide today whether to set in motion a process that would strip local politicians of their powers and place its financial affairs in the hands of an emergency manager.

Assets from golf courses to sewage plants could be sold off. Residents are likely to be charged new fees for basic services while policing and fire-fighting may be outsourced. Other city workers could be dismissed as the city scrambles to cut spending.

Anger at the imminent bankruptcy has taken on a racial dimension, with some suggesting that Washington would have fought far harder to rescue Detroit if its population was mostly white.

Mr Snyder is a white Republican, a fact that has stoked resentment among civic leaders. They have branded the plan an "unconstitutional and immoral" means of disenfranchising the city's mostly black voters.

Protestors vented their anger at a recent public meeting. One shouted: "This is white supremacy. Before we let you take over our city, we will burn it down."

Detroit, which was America's fifth-largest city with 1.8 million residents in 1950, had just 714,000 in 2010. In the past decade, a quarter of the population has fled, pushed out by the collapse of the car industry, soaring crime rates, rising unemployment and plummeting school standards.

As a result, vast swathes of Motown are all but devoid of human life. In neighbourhoods on the city's east side, where thousands of factory workers once lived in detached clapboard houses, pheasants, deer, foxes and coyotes roam.

For miles, visitors are confronted with little but rubble and ash. In some places, between burnt-out hulks of former homes, grass has grown five feet high to form pockets of inner-city prairie. "The situation is made worse by a fleeing middle class, a collapsing school system and steadily diminishing revenues," said Irvin Reid, part of a team appointed to survey Detroit's fiscal position.

The crisis has been brewing for decades. The three biggest car makers - Ford, Chrysler and General Motors - started moving factories away from Detroit half a century ago, and the exodus of white families has continued ever since.

Commentators believe that the 2008 credit crunch merely delivered the coup de grace.

"This is a city that's been on the edge for a long time," said Lyke Thompson, director of the Centre for Urban Studies at Wayne State University.

"What we see now is the culmination of a very long process, and the prognosis is grim. We're going to see more layoffs in a region that has already suffered an extraordinary number of redundancies."