Detroit's disaster: A once-great city's collapse is a cautionary tale

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Nobody should be surprised that Detroit has become the largest city in U.S. history to file for municipal bankruptcy. Detroit is virtually out of cash, an eye-popping $19 billion in debt, and -- for its own good -- no longer able to borrow more.

The city's emergency manager, who tried to negotiate with creditors, might have waited longer to file, but his hand was forced when he learned that city employees and retirees were about to seek an injunction to bar a bankruptcy filing. On Friday, a state judge ordered him to withdraw the bankruptcy petition, claiming the state law that authorizes it violates Michigan's constitution.

Uncharted waters lie ahead. Presuming the city's application is ultimately granted, a federal judge will begin a process that could take years.

In the short term, Detroiters' lives are likely to get better. City officials will stop paying creditors and use what money they have to improve services such as public safety. In the long run, though, everyone will feel pain. Employees and retirees will lose some pension and health benefits. Assets, possibly even paintings from the renowned Detroit Institute of Arts, could be sold.

There has been finger-pointing about who is to blame. The answer is everyone, from those who used Detroit up and then abandoned it, to politicians who mismanaged money, signed contracts they could never live up to and borrowed funds they could never hope to repay.

Let's hope that Detroit can emerge from bankruptcy in a position to start over as a place that can provide services for its residents, attract growth and pay its bills. Pittsburghers -- and residents of every other city -- should study what has happened to one of the nation's great cities, and use Detroit's example as a cautionary tale.



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