In December 1978, Cleveland, Ohio became the first in the United States to default on its debts since the Great Depression. The city, soon nicknamed “Mistake by the Lake,” owed six banks a total of $15 million. It took 22 months — and a new mayor, George Voinovich — for the city to regain financial solvency.
In the next few days, Detroit Mayor Dave Bing will decide whether to appoint an emergency manager for the bankrupt city. Thomas Sugrue, professor of History and Sociology at the University of Pennsylvania, explains what lessons Detroit should learn from the history of Cleveland’s default and recovery.
The story you just read is available to read for free because thousands of listeners and readers like you generously support our nonprofit newsroom. Every day, the reporters and producers at The World are hard at work bringing you human-centered news from across the globe. But we can’t do it without you: We need your support to ensure we can continue this work for another year.
When you make a gift of $10 or more a month, we’ll invite you to a virtual behind-the-scenes tour of our newsroom to thank you for being with The World.