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Last updated at 14:32 BST, Friday, 19 July 2013

Detroit goes bankrupt

Summary

19 July 2013

Detroit has become the largest US city ever to file for bankruptcy, with debts of at least $15bn. Once the heart of the US car industry, Detroit's population has fallen from two million in the 1950s to 713,000 today.

Reporter:

Jonny Dymond

Car for sale in Detroit

The city was once famous for its automobile industry.

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Report

The birthplace of mass production, 'Motor City', has thrown in the towel.

Decades of decline led up to this moment. Spiralling crime and the departure of the car factories that gave Detroit its nickname saw the destruction of its tax base. Years of incompetent and corrupt management left the city insolvent.

The emergency manager appointed by the state governor spent months going through the city's books. His conclusion: the city's debts are too great to be sustained.

Now the courts will have to work out who gets paid what, and the city's fall is complete.

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Vocabulary

mass production

producing a large quantities of goods using machines in a factory

thrown in the towel

given up, admitted defeat

spiralling

increasing faster and faster in a downward direction

tax base

total of income, assets and property which can be taxed by a government

incompetent

not having the ability to do something in the right way

insolvent

not having enough money to pay debts

going through

examining carefully

books

financial records