So is the satisfaction of seeing Detroit go bankrupt worth the extra dollars in local property taxes y’all will have to pay because investors will now demand more to buy your community's muni bonds?
this assumes this:
That will hit the pocket books of most beeks because debt (bonds) is how most cities fund new schools, repairs, roads, bridges, unbalanced budgets, etc.
different states and cities do things in different ways, but here a bond issue is approved by the voters. if the voters are dumb enough to approve, i guess they are on the hook.
i find it hard to see why any investor would have been buying anything to do with Detroit for at least the last decade. investors, as you point out, expect a return and they knew they wouldn't get onr there. that's probably part of the debt problem that they couldn't get anyone to "invest".
the solution is simple. don't spend what you don't have IN HAND. getting to that solution is going to be a painful journey. yes, if it means i have to take it in the backside a couple of times while the rest of the folks learn that lesson, so be it. just don't ask me to bail out the folks who made the bad choices in the first place. and if you are going to buy bonds, buy Puerto Rico rum bonds :-)