Detroit, like other cities, faces a choice. It has made promises to creditors and retirees that it cannot meet in full. How should it share the pain? For Motown, the question will be settled in court. The outcome will send ripples far and wide, affecting the holders of municipal bonds, the insurers that guarantee such bonds, state and municipal public-sector workers and, last but not least, taxpayers around America. Detroit’s unfunded health-care burden is actually larger than its pension deficit…
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