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From VOA Learning English, |
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this is the Economics Report. |
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Detroit Mayor Dave Bing |
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had to report some bad news last month. |
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He said Detroit was seeking bankruptcy protection. |
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The move would give the city |
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court protection from creditors. |
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"This is very difficult for all of us |
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but if it's going to make the citizens better off, |
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then this is a new start for us." |
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The decision to declare bankruptcy |
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is an offer to restruction and reduce debt. |
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It comes at a difficult time for Detroit. |
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In March, Michigan Governor Rick Snyder named Kevyn Orr, |
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a bankruptcy expert to oversee the city's financial problems. |
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Detroit has been struggling to reduce a budget deficit of |
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more than $300 million. |
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In addtion, the city's long-term debt |
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has increased to at least $18 billion. |
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Detroit's problems have grown over many years. |
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Michigan State University professor Eric Scorsone says |
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the city depended to much on one-industry. |
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"You know, Unlike Chicago, New York |
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and other cities where had more economic diversity, |
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Detroit really didn't. |
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It had the auto industry, |
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it had suppliers to the auto industry, |
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and so as those went away, |
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the city began a very long decline |
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that's really occurred over 50 years essentially." |
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Jobs with car manufactures were a big reason why Detroit |
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was one of the country's largest cities half a centry ago. |
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In the 1950s, it had a population of about 1.8 million people. |
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Today, the number is down to less than 800,000. |
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Robin Boyle is a professor of urban planning |
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at Wayne State University. |
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He says over the years, many Detroit residents |
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moved to areas outside the city, or even left the state. |
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That hurt Detroit's ability to invest in the city. |
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"They have so little disposable income to reinvest in their communities, |
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that if they have money they leave, |
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they go to the suburbs or they go to find work elsewhere, |
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further putting us into this vicious cycle |
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that drives us further and further down. |
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How you break that is the challenge in Detroit." |
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It is rare for a large city to seek bankruptcy protection. |
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In 1975, New York City came close |
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before the federal government agree to provide money. |
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Detroit, however, is the largest city to seek bankruptcy. |
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A federal judge will consider Detroit's request. |
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The judge's decision is expected in one to three month. |
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One of the main issues is what to do |
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about the retirement pay of city workers. |
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Currently, there are many more retired workers |
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than those pay into the pension system. |
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And that's the Economics Report in VOA Learning English. |
