Friday, March 1, 2013

Michigan Governor Declares Emergency in Detroit; Grabs Power from Locals

Michigan Governor Rick Snyder plans to name an emergency manager to handle Detroit’s fiscal crisis, stripping power from local officials.

Detroit has a budget deficit of about $327 million and more than $14 billion in long-term obligations, reports Bloomberg. Starting later this month, a manager will have the power to cancel labor contracts, cut spending and sell assets.

This all is, of course, an attempt to prevent what could be the largest U.S. municipal bankruptcy. Governments always attempt to protect government bonds against default. Snyder will act to protect Detroit's debt holders.

However, the best thing that could happen to Detroit is for the city to declare bankruptcy and start fresh, rather than see control move to the governor, who is sure to put in a Motown version of eurozone-type austerity on the city.


  1. If only everyone could borrow in the paper they printed.

  2. Just saw the governor on a CNN interview. He wants to solve the problem by growing Detroit.

    Bleeding money? Sure! But we'll make up for it in volume.

  3. Can't wait to get Karen De Coster's take on this!!