City of Detroit Files for Bankruptcy

A large drop in population and billions in debt lead to a tough decision for city officials.
3:00 | 07/19/13

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Transcript for City of Detroit Files for Bankruptcy
motor city. A city in crisis this morning. As detroit has filed for bankruptcy, becoming the largest american city ever to fold. Bloomberg anchor, abc news contributor, betty liu, is here with more. Betty, we're talking about a city that was the symbol of american corporate strength. It is incredible. There's been no event quite like this. No city as big as detroit that's filed for bankruptcy. What happened here? People have been leaving the city for years. BACK IN THE 1950s, YOU HAD Almost 2 million people living at the peak of detroit. Now, just $700,000. More than half of the population. You're collecting income and property taxes. But you have to pay the police, the fire department, you have to pay into the retirement fund. What does this look like? 18 billion of debt in detroit. 78,000 empty buildings. Get this, josh. Half the street lights, almost half the street lights in detroit are not even working. It is incredible. And city officials had to make a tough choice yesterday. They were running out of money. They said, we need to make the choice to file for bankruptcy. It will be felt nationally. This is all happening as the dow soars every higher. This heat wave is affecting stocks. Opening at all-time highs again. There's two reasons here. One, earnings are doing well. Companies are benefiting from low interest rates. At the same time, chairman ben bernanke says he's going to baby-sit this economy. It's time to buy stocks. Good news for some folks. Not there in the state of michigan.

This transcript has been automatically generated and may not be 100% accurate.

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