Detroit is back on the brink of insolvency, just months after signing an agreement with state officials designed to shore up its shaky finances, the Wall Street Journal reported today. Some city and state leaders believe Detroit has now reached a breaking point, where it must decide whether to accept a state-appointed emergency manager to run the government or file for bankruptcy to prevent a default on more than $8 billion in bonds. For years, Detroit has borrowed millions to fund its operations, unable to find ways to boost revenues. Financial mismanagement stemming from political corruption, a hard-hit housing market and a massive loss in population—25 percent of all city residents left from 2000 to 2010—were all factors in its fiscal woes. The latest crisis stems from an impasse between the mayor and the City Council over enacting provisions of April's consent agreement, as well as the repeal of a state law that served as the backbone of that agreement.
