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other than it is now a complete and utter wasteland in comparison to the rest of the US?

foobarian 11y ago
Yeah but which is the cause and which is the effect?
vonmoltke 11y ago
It was such before the bankruptcy. In fact, the flight of people and businesses out of the city, and resulting collapse in tax base, is part of what caused the bankruptcy.
msandford 11y ago
It was headed that way before the bankruptcy, though. People moving out caused the default, not the default causing people to move out. The point is that Detroit going broke didn't bring all the capital markets in the US to their knees. It's definitely not good that Detroit went broke. But it didn't break the US economy.
mikeash 11y ago
That happened well before. The bankruptcy was the result, not the cause, of Detroit's decline. Note that "wasteland" is exaggerated. Certainly there are a lot of abandoned buildings and neighborhoods, but many places are still thriving. It's not what it once was, but there's still a lot going on. Seems that there are a lot of stakeholders who are care a lot more about not having Greece default than was the case for Detroit, while at the same time nobody has enough power to really make anybody do anything. So Greece is coming down to a very long and drawn-out series of negotiations where nobody can put their foot down and say, look, here are the lines you can't cross, and here's where you're allowed some flexibility. Figure it out. With Detroit, it all happened in an environment with a strong legal system that could keep the various parties under control. The fact that federal (and even state) benefits aren't affected by Detroit's finances no doubt helps a lot too. No matter what happened with Detroit, 70-year-old retired autoworkers living there would continue to receive Social Security. That simplifies things a lot since there's a backstop for how bad things can get in the worst case.

Yeah but which is the cause and which is the effect?

It was such before the bankruptcy. In fact, the flight of people and businesses out of the city, and resulting collapse in tax base, is part of what caused the bankruptcy.

msandford 11y ago

It was headed that way before the bankruptcy, though. People moving out caused the default, not the default causing people to move out. The point is that Detroit going broke didn't bring all the capital markets in the US to their knees. It's definitely not good that Detroit went broke. But it didn't break the US economy.

mikeash 11y ago

That happened well before. The bankruptcy was the result, not the cause, of Detroit's decline. Note that "wasteland" is exaggerated. Certainly there are a lot of abandoned buildings and neighborhoods, but many places are still thriving. It's not what it once was, but there's still a lot going on. Seems that there are a lot of stakeholders who are care a lot more about not having Greece default than was the case for Detroit, while at the same time nobody has enough power to really make anybody do anything. So Greece is coming down to a very long and drawn-out series of negotiations where nobody can put their foot down and say, look, here are the lines you can't cross, and here's where you're allowed some flexibility. Figure it out. With Detroit, it all happened in an environment with a strong legal system that could keep the various parties under control. The fact that federal (and even state) benefits aren't affected by Detroit's finances no doubt helps a lot too. No matter what happened with Detroit, 70-year-old retired autoworkers living there would continue to receive Social Security. That simplifies things a lot since there's a backstop for how bad things can get in the worst case.