“Saddled with $18 billion in debt, unable to pay its bills or provide basic services, Detroit in July 2013 was authorized by Gov. Rick Snyder to file the largest municipal bankruptcy in U.S. history. The bankruptcy was the culmination of a half-century of residential flight, a dwindling tax base, deferred investment and financial mismanagement. … Last week, Chicago’s junk-rated school system sold 5-year bonds for a yield of 4.16 percent, or 1.95 percentage points more than what top-rated borrowers pay. Detroit’s 5-year bonds sold Tuesday for a yield of 3.91 percent, about 1.81 percentage points above the benchmark.”

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