Detroit Memo
Overview:
On July 18, 2013 the city of Detroit, Michigan filed for bankruptcy protection under Chapter 9 of the United States Bankruptcy Code. Detroit claimed outstanding debts and unfunded liabilities of nearly $20 billion, making the city the largest municipal bankruptcy in American history. The causes of Detroit's financial ruin and the solutions required have subsequently been the topic of debate among city officials, policymakers and outside stakeholders, including investors and labor unions.
Directions:
Write a memo of approximately two single-spaced pages outlining the major causes of Detroit's bankruptcy and what you believe must be done to both repair the city's current finances and prevent the same problems from reoccurring in the future. At minimum, you should consider the following sources for context:
l Supplemental Documentation of the Detroit Financial Review Team: michigan.gov/documents/treasury/Review_Team_Report_Supplemental_2-19-13_411866_7. pdf
l Detroit Free Press' collection of articles on city's bankruptcy: freep.com/bankruptcy
l "Detroit Outlines Map to Solvency, Stressing Repair." New York Times, February 21, 2014: nytimes.com/2014/02/22/us/detroit-roadmap.html
l "How Detroit went broke: The answers may surprise you - and don't blame Coleman Young" Detroit Free Press, September 15, 2013: freep.com/interactive/article/20130915/NEWS01/130801004/Detroit-Bankruptcy-history-1 950-debt-pension-revenue
Your memo should be concise but specific and must consider the financial and political feasibility of proposed solutions. Use headings and subheadings as appropriate. You may include graphs and charts but are not required to do so; however, any non-text elements do not count toward the page requirement. Sources should be cited using footnotes with details given at the bottom of each page.