updated 7/10/2013 11:16:58 AM ET 2013-07-10T15:16:58

Once the heart of the nation’s thriving automobile industry, Detroit now faces bankruptcy unlike any other fiscal crisis facing a municipality in American history.

Once the heart of the nation’s thriving automobile industry, Detroit now faces bankruptcy unlike any other fiscal crisis hitting a municipality in American history. Michigan’s largest city currently owes creditors between $16 and $18 billion, with the prospect of facing bankruptcy as early as this month.

“To be honest with you…this week is pretty crucial,” Detroit Emergency Manager Kevyn Orr told the Detroit Free Press on Monday when asked whether or not the city would file for Chapter 9 bankruptcy. He is attempting to re-negotiate lower interest rates and concessions among its debt holders.

Detroit was once the fifth largest city in the United States, but its population has since plummeted to just over 700,000 people—a 25% drop since 2000. During that same time period, the unemployment rate has has risen from 7.3% 18.6%. With fewer people living in the city to contribute tax revenue, city services continue to slump.

“The less the city spends on basic services, the less people want to live in Detroit,” MSNBC host Chris Hayes said Tuesday.

The streets are even too dangerous to traverse, with 40% of traffic lights out of commission. And most alarming – it takes an average of 58 minutes for the Detroit police to respond to calls for “the highest-priority crimes,” reports the New York Times.

“One of the critical issues facing the city in terms of the long-term needs of our residents—who are clearly the priority—they must have services,” Detroit City Councilwoman Joann Watson said Tuesday. “They deserve it.”

Video: Detroit poised to go under

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    >>> the city of detroit is poised to go under. that is not an exaggeration. as early as this month, detroit could become the largest city in the country's history to go bankrupt. kevin ore is city's emergency financial manager , appointed by fwn gn republican governor rick snyder. he's tasked with turning around detroit 's money problems. he was asked yesterday by " detroit free press" whether the city would file for bankruptcy within the month, and he said, "to be honest with you, this week, this week, is pretty crucial. detroit owes creditors between $16 billion and $18 billion and finds itself in a position that anyone has ever found themselves in the quicksand of too much debt can relate to. the city is fending off demands for higher interest rates . has to decide whether to make the choice to default on some of that debt and all the while is making brutally difficult triage decisions on which spending to cut. it's led detroit mayor david bing to cut city spending by $172 million a year since taking office in 2009 . the less the city spends on basic services, the less people want to live in detroit . the city's population has dropped by 5% since 2000 . around 30% of detroit is vacant. the empty properties occupy an area nearly the size of san francisco . according to the " washington post ," property tax collections are down 20% in the last 50 years. the more the tax base shrink, the less revenue the city has. the resz revenue, services, and the more people leave. today the "the new york times" had a really eye opening front-page story about what all this means in real terms for the people of detroit . and let's remember there are still 700,000 people living there. people in detroit can no longer count on even the most basic of city services . these folks are planning for an existence in which police just stop shows up for emergencies. the detroit police 's average response time for calls for the highest priority crimes this year was 58 minutes. 58 minutes. of all the sad, unfortunate numbers that are defining detroit today, that one may be the most disturbing. joining me now is joanne watson, a member of the detroit city council , former executive director of the detroit naacp. councilwoman, my first question for you, as someone who's not in detroit , who's been following the coverage of detroit closely, are things there as dire as they seem from the outside?

    >> first of all, thank you very much for having me, chris hayes , and i appreciate the opportunity to provide some ambulance to the article that was in "the new york times" today. clearly there's a fiscal crisis in this community that's undeniable. the fact that $139 million just in interest is owed to financial institutions , banks, and $105 million in principle is something that must be renegotiated. that's what the leadership of the city has put before these financial groups. we don't want to spend that kind of money paying down debt when the services are much more critical to the needs of our citizens. but the most important crisis you should be aware of facing this city is not fiscal. it's constitutional. there is the appointed emergency manager has removed the powers of the elected officials so not only in detroit , but for 52% of the black citizens in michigan, there is no representative leadership. there's no elected leadership representing their interests.

    >> so as you as an elected --

    >> and that was done -- the citizens, 2.3 million michigan citizens voted this past november, the same day we voted to re-elect president barack obama , 2.3 million citizens repealed the emergency management law. what did the republicans do? went to work in december during the lame duck session , put it back in force lawlessly. and that is something that's not being mentioned.

    >> so you have an emergency manager now named kevyn orr.

    >> yes.

    >> he is the one who's been quoted in the papers, he's the one charged now with the state, with trying to negotiate a fiscal solution for the city. what is he doing now that you think, that you would be doing differently as the autonomous city government of detroit ?

    >> one of the things that should be noticed is that the importance of renegotiating the debt load is something that city council members, like myself, talked about, urged to be put in place to remediate the city's finances. one of the things we need to do is make sure the people who owe the city money, like the state of michigan , which owes a ton, pay their debt. can you imagine? the same state of michigan , this republican-led state, governor and legislature, is refusing to pay its debt to the city of detroit . can you imagine that?

    >> the state owes the city money?

    >> yes. yes. and the bill has been put before them. they have publicly acknowledged, it's been acknowledged in electronic and print media that they owe, they refuse to pay, and they're unashamedly arrogant in that posture. we're not going to pay. and you can't make us pay.

    >> councilwoman, you're talking about --

    >> but one of the critical issues facing the city in terms of the long-term needs of our residents, who clearly are the priority, they must have services. they deserve it and we cannot have a lack of public safety response, as you outlined in the earlier segment. the -- we have a new police chief who just started five days ago who is committed to lessening that response time and have a level of integrity and principle.

    >> that is not a job i would --

    >> committed to that.

    >> that is not a job i wish on my worst enemy. detroit city council member, joann watson, thank you so much.


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