Detroit isn't the only city in the country facing difficult times. But it is the only major city, and the largest city in U.S. history, facing bankruptcy. This kind of financial deterioration takes place over time and can be intensified by outside forces. It is rarely a simple matter of pointing to a single cause. In 1950 Detroit had a population of nearly 2 million. Their problems started in the late 1950's, driven by the first of two key outside forces, suburbanization. People wanting more space moved to the suburbs driving the city population and property values down. The loss of property tax revenue led to the implementation of an income tax of 1% in 1962. It wasn't enough. A utility tax was added in 1971, but by then the second outside force was taking hold, deindustrialization. Foreign competition was eroding Detroit's auto leadership and employment base. The population dropped 20% during the 1970's, further depleting property values and tax revenue. A casino wagering tax was added in 1999, and existing tax rates were increased, resulting in Detroit having the highest income and property taxes in all of Michigan. But the revenue gap continued to widen. The population shrank another 25% between 2000 and 2010. Detroit's population is now just over 700,000.

City cost reduction efforts weren't enough to close the revenue gap. As of 2004, the number of city employees had been reduced by less than 30%. But the property value tax base had dropped from $45 billion in 1958 to about $16 billion in 2004...a decrease of almost 65%. Spending on retiree healthcare increased 46% between 2000 and 2012. Spending on city employees diverted resources from public safety and infrastructure. Detroit's finances were crumbling, as was the city itself. People began leaving the city to find better, safer living conditions.