To go bankrupt in the USA means that a person's debts are so high that he/she will probably never be able to pay them off. In this case, a person (or corporation or even a city) can go to court and 'declare bankruptcy.' A judge then determines whether that person is really insolvent (incapable of paying back his/her loans).
If this is decided, the person declaring bankruptcy will only have to pay back 10% of the money he/she owes. So if he/she owes $50,000 to creditors, he/she will only have to pay them $5,000. However, the person's credit history will be damaged and he/she will probably not be able to get any more credit (no credit cards or loans) for at least 7 years. Also, the person will not be able to declare bankruptcy again for at least 7 years.
The city of Detroit has recently declared bankruptcy. Basically the city used to be wealthy because of the automobile industry. There were many jobs in this industry and the government was able to collect a lot in taxes from the companies and employees. The US auto industry, however, has not competed well against foreign car companies, which have been making smaller and more fuel efficient models. Therefore, due to the problems of the auto industry in Detroit, not much money has been generated, the government continually borrowed money to provide services to the people, and now Detroit must declare bankruptcy and find a way to create businesses and jobs in that city for the future.
----------------------
About the article:
During his election campaign against Mitt Romney, Barack Obama boasted of how he saved two huge automobile companies through "bailouts." A bailout is when the US government gives money to companies to stop them from failing. Usually the money is in the form of low interest loans.
Unfortunately for the people of Detroit, the federal government (Washington D.C.) is not going to help them. The city where the automobile industry began is at least 20 billion dollars in debt and will have to declare bankruptcy.
Please read the article:
http://news.yahoo.com/no-signs-washington-come-detroits-rescue-170850937.html
Vocabulary to help you understand the article:
bleak - if an environment is bleak, it means there is very little there. Antarctica has a bleak environment - it is nothing but ice and snow. Parts of Africa have lush environments - there is a huge variety of different plants and trees and wildlife. So if a situation is 'bleak' this means there is very little hope or few opportunities for the situation to get better.
The Great Recession - we are now still in, apparently, the Great Recession. The world economy has slowed down to the point where there is high unemployment and not much is being produced.
bipartisan - bi means two. Partisan means political party. So if there is a bipartisan vote, it means two political parties agree with each other and cooperate with each other instead of fighting with each other.
appetite - in this case it means 'desire.' Neither party really wants to do anything to help Detroit.
to rescue something - to save something from harm
resources are strained - this means that at one time there were enough resources but they have been mostly used up: there are few resources left but many needs for these resources.
a constraint - a limit. The government is limited as to how much it can spend because the Congress did not take timely action earlier and, by law, money was automatically cut (removed) from the US budget because of Congress' inaction.
in firm control - they control that part of the Congress easily. The US Congress is divided into two parts: The Senate and the House. Democrats control the Senate and Republicans control the House. Very little can be accomplished under this situation.
his plate is so full - he has so many things to do.
throwing Detroit into the mix - adding Detroit to the rest of what he ahs to do
the era - the period of time
a declining population, accelerated by hard times - this sentence might be a bit confusing. The author is saying that the decline or drop in population was due to the difficult times the auto industry in Detroit has had.
punishing - here it means very difficult. If you go through a punishing workout at the gym, you really really workout.
in near gridlock territory - gridlock is the term for non-cooperation between the political parties. If the parties do not cooperate, nothing gets done, and this is called gridlock.
a wait and see approach - they are not going to do anything yet...they are just waiting to see what might happen and whether they can do anything.
federal - this is the US government in Washington D.C.
to rule something out - to say something is not an option or is not possible.
insolvency - when someone (or in this case some city) just simply can't pay its debts.
diligent - careful, precise, meticulous, detailed
a tough step - a difficult move or action to take
delegation - each state gets a number of Congressmen/women based on the state's population. This is the state's delegation.
to clamor for - to demand, to strongly request
pension funds sued - a pension is money a person gets after he retires from a job. City workers feel that their pensions will be cut (lowered) after this bankruptcy decision, so they went to court hoping a judge would stop the bankruptcy. The judge refused to do that.
strings attached - this means, basically, I'll give you something but I want something in return! If someone is generous they might give you something and say, "No strings attached!"
a lifeline - if someone falls into the ocean, someone might throw him/her a lifeline so that the person can be pulled to safety.
stimulus spending - when the government spends money to try to stimulate the economy (make the economy more active).
a mortgage - monthly payments people make in order to buy a house.
remote - far away; in this case, remote means unlikely.
to be off the hook - to be safe, to be able to avoid responsibility.
align them - make sure they provide Detroit with the money that Detroit really needs and requests. To align something means to put in in line with something else - to make sure something fits something else.
------------------------------------
