Detroit Going Bankrupt
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Detroit Going Bankrupt

Detroit Going Bankrupt
The bustling city of Detroit once symbolized the good times enjoyed by the people of the American state of Michigan. The city was once the envy of the world for its flourishing automobile industry. The presence of global car giants of the likes of General Motors, Ford and Chrysler turned Detroit into one of the most prosperous and happening cities in the United States. During its glory days the city was home to more than 1.8 million people. Unfortunately Detroit seems to have left behind its good times a long way behind and the fortunes of the automobile city have been seen a precipitous decline during the past two decades. On July 2013 the nadir was reached when the Detroit municipality officially admitted that the finances of the city were damaged beyond repair and filed for bankruptcy protection. However the event didn’t surprise financial experts who have been closely following the fortunes of the city for the past few years.  The single most important reason behind the steep fall in Detroit’s fortunes is the inexorable decline of the city’s automobile industry.  Out of the three major automobile firms that operate out of the city only Ford still makes a profit while the rest have gone broke. While the rise of the cost effective fuel efficient Japanese and Korean cars had made things very difficult for the American car industry, the problems have been greatly exacerbated with the 2008 Global Financial Crisis that shook the world and still is a long way off from any kind of resolution. All these factors have combined to ensure the fall from grace for the city that was once the pride of Michigan. The fact that Detroit doesn’t possess any other major industry other than the automobile factories have only made matters worse and ensured that it will be a long time before the city can ever hope for any upswing in its fortunes. The signs of decline were hard to miss during the past decade. The city’s population has fallen drastically from the 1.8 million head count mark prevalent during the 1950’s decade to just around 700,000 today. Most of Detroit’s intelligentsia and the middle class have migrated to greener pastures during the past decade. This has ensured that the steady flow of tax dollars once contributed by them has now totally dried up. As a result of this severe cash crunch, many critical services like policing have been abandoned resulting in a massive spurt in the once peaceful city’s crime graph. Not for nothing is Detroit now referred to as one of the most unsafe places in America. Experts reckon that there is no way Detroit can ever honor its long term debt that now stands at a staggering $20 billion. Most of this money is owed to the city’s myriad pension funds. The only way Detroit can hope to reinvent itself is by starting on a new slate be declaring bankruptcy and paying off its creditors by selling off all its assets.
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