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It's even worse than greece :
The US city of Detroit in Michigan has become the largest American city ever to file for bankruptcy, with debts of at least $15bn (£10bn).
State-appointed emergency manager Kevyn Orr asked a federal judge to place the city into bankruptcy protection.
If it is approved, he would be allowed to liquidate city assets to satisfy creditors and pensions.
Detroit stopped unsecured-debt payments last month to keep the city running as Mr Orr negotiated with creditors.
He proposed a deal last month in which creditors would accept 10 cents for every dollar they were owed.
But two pension funds representing retired city workers resisted the plan. Thursday's bankruptcy filing comes days ahead of a hearing that would have tried to stop the city from making such a move.
Mr Orr suggested at the time there was a 50-50 chance of the city needing to file for bankruptcy. He also said the city's long-term debt could be between $17bn and $20bn.
'Only alternative'
At a press briefing on Thursday, Mr Orr said filing for bankruptcy was the "first step toward restoring the city".
Alongside him, Detroit Mayor Dave Bing said that residents had to make a new start.
"I really didn't want to go in this direction - but now that we are here, we have to make the best of it," Mr Bing said.
The mayor also assured residents that the city would stay open and bills would be paid despite the filing.
"Paychecks for our city employees will continue, services will continue," he said.
In a letter accompanying Thursday's filing, Michigan's Governor Rick Snyder, a Republican, said he had approved the request from Mr Orr to file for Chapter 9 bankruptcy.
"Only one feasible path offers a way out," Gov Snyder said, adding that residents needed a clear exit from the "cycle of ever decreasing services".
"The only way to do those things is to radically restructure the city and allow it to reinvent itself without the burden of impossible obligations.
State-appointed emergency manager Kevyn Orr asked a federal judge to place the city into bankruptcy protection.
If it is approved, he would be allowed to liquidate city assets to satisfy creditors and pensions.
Detroit stopped unsecured-debt payments last month to keep the city running as Mr Orr negotiated with creditors.
He proposed a deal last month in which creditors would accept 10 cents for every dollar they were owed.
But two pension funds representing retired city workers resisted the plan. Thursday's bankruptcy filing comes days ahead of a hearing that would have tried to stop the city from making such a move.
Mr Orr suggested at the time there was a 50-50 chance of the city needing to file for bankruptcy. He also said the city's long-term debt could be between $17bn and $20bn.
'Only alternative'
At a press briefing on Thursday, Mr Orr said filing for bankruptcy was the "first step toward restoring the city".
Alongside him, Detroit Mayor Dave Bing said that residents had to make a new start.
"I really didn't want to go in this direction - but now that we are here, we have to make the best of it," Mr Bing said.
The mayor also assured residents that the city would stay open and bills would be paid despite the filing.
"Paychecks for our city employees will continue, services will continue," he said.
In a letter accompanying Thursday's filing, Michigan's Governor Rick Snyder, a Republican, said he had approved the request from Mr Orr to file for Chapter 9 bankruptcy.
"Only one feasible path offers a way out," Gov Snyder said, adding that residents needed a clear exit from the "cycle of ever decreasing services".
"The only way to do those things is to radically restructure the city and allow it to reinvent itself without the burden of impossible obligations.
The murder rate is at a 40-year high and only one third of the its ambulances were in service in early 2013.
Declining investment in street lights and emergency services have made it difficult to police the city.
Declining investment in street lights and emergency services have made it difficult to police the city.
at the thought that Detroit went bankrupt because of its tax rates, rather than its ludicrous public debts, unfunded pension plans etc. combined with white flight.
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