For Detroit, A Crisis Born Of Bad Decisions And False Hope

'A Time Bomb Sure To Explode'
DETROIT - NOVEMBER 21: The General Motors (GM) world headquarters building stands tallest amidst the Renaissance Center in the skyline of city's downtown on November 21, 2008 in Detroit, Michigan. As car and truck sales have plummeted across the country, large inventories are building at dealerships and factories. The Big Three U.S. automakers, General Motors (GM), Ford Motor Co. and Chrysler LLC, failed after appearing this week in Washington to receive money after asking the government for federal funds to curb the decline of the American auto industry. The city of Detroit, home to the Big Three, would be hardest hit if the government allows these auto makers to fall into bankruptcy. (Photo by Spencer Platt/Getty Images)
DETROIT - NOVEMBER 21: The General Motors (GM) world headquarters building stands tallest amidst the Renaissance Center in the skyline of city's downtown on November 21, 2008 in Detroit, Michigan. As car and truck sales have plummeted across the country, large inventories are building at dealerships and factories. The Big Three U.S. automakers, General Motors (GM), Ford Motor Co. and Chrysler LLC, failed after appearing this week in Washington to receive money after asking the government for federal funds to curb the decline of the American auto industry. The city of Detroit, home to the Big Three, would be hardest hit if the government allows these auto makers to fall into bankruptcy. (Photo by Spencer Platt/Getty Images)

DETROIT -- This city was already sinking under hundreds of millions of dollars in bills that it could not pay when a municipal auditor brought in a veteran financial consultant to dig through the books. A seasoned turnaround man and former actuary with Ford Motor Co., he was stunned by what he found: an additional $7.2 billion in retiree health costs that had never been reported, or even tallied up.
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"The city must take some drastic steps," the consultant, John Boyle, warned the City Council in delivering his report at a public meeting in 2005. Among the options he suggested was filing for bankruptcy.

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