Detroit Goes From Motor City to Junkyard

A Michigan judge has just declared that Detroit must withdraw the petition for bankruptcy that it filed yesterday, criticizing Michigan's governor Rick Snyder for rushing the filing before she could rule on a bid by bond investors and pensions to stop the city from stiffing them.

But notwithstanding the judicial ruling and attempted procedural trickery, Detroit faces an ugly and unyielding truth: It can't pay its debts and obligations. The city'sfinancial condition has been weak for decades, and over the last 15 years, it has collapsed. Since peaking in 1950, the population of the city has fallen by more than half; what's left is poor, with a median household income of only $27,862. Unfortunately, Detroit still has the size and government benefits structureof a much larger, more prosperous city. Something has to shrink.