The economic crisis in general and in specific sectors such as industry has made some US cities go bankrupt in order to meet their immediate needs. The most notorious example is Detroit, but it was not the only city to resort to this extreme solution.
The huge debt leads to bankruptcy
After the outbreak of the economic crisis, several US cities declared bankrupt, the most important being Detroit., this condition is due, in most cases, to the high debt impossible to pay back to the creditors in the moment when bankruptcy is declared.
Bankruptcy: the ultimate solution
Despite the economic crisis affecting most countries with weaker economies such as Spain, Ireland, Greece or Portugal, superpowers like the US do not escape its effects and several US cities declared bankrupt, unable to pay back the debts to the creditors.
Bankrupt cities in the US
The largest city in the United States that has been declared bankrupt is Detroit, Michigan, particularly affected by the decline of the automotive industry. The city has been declining since mid-seventies. Detroit owed 14,000 million to the creditors when it filed for bankruptcy in July 2013.
Another American city that has been declared bankrupt is San Bernardino, California. The city with 60% Hispanic population has suffered the ravages of the housing crisis for years.
Another case of bankruptcy is Central Falls, in Rhode Island. The city was forced to declare bankruptcy in May 2012 with a debt of 4,800 million dollars. The same situation was also faced by Mammonth Lake, Stockton, and Jefferson County.
Another stunning case of bankruptcy in the United States is the city of Harrisburg, Pennsylvania. The reason behind the bankruptcy wasn’t the weak economic environment, but the construction of an incinerator that destroyed the local economy with the supposed debt.