Quote from piezoe:
It is relatively easy to summarize what happened in Detroit: Detroit was too heavily dependent on one industry. Over the years de facto segregation of economic classes occurred spontaneously as those of greater economic means moved to suburbs. Whether this move was fueled by rising crime rates, rising property taxes, or other issues is immaterial. This meant, of course, that the local tax burden was assumed by an increasingly smaller fraction of the cities residents. This accelerated the trend toward relocation to the suburbs, and with that there was a further rise in the crime rate in the inner city. --The reasons for this have been addressed nicely in Jane Jacobs' "The Death and Life of Great American Cities" written in 1961!
City management, which one can argue was not very good in the first place, found itself under increasing political pressure and did not, or could not, adjust by cutting back sufficiently on services and other expenditures, nor was it forward thinking enough to institute other measures that might have succeeded in heading off otherwise inevitable collapse. When the American auto industry went bad, the city, which was already on the precipice of collapse, experienced what will happen to any city where a too small fraction of the population is asked to bear the financial burden of maintaining infrastructure. Those who can get out will, so there will be even fewer remaining to bear the cost. Those who remain are overwhelmingly in the underclass with virtually no disposable wealth and no means of supporting the City's infrastructure via taxes.
This is a pattern that can play out, and is as I write this, in any City where a trend is established that requires an increasingly smaller fraction of the City's inhabitants to bear an increasingly larger fraction of the City's operational costs. Usually there will be warning signs many years in advance, but once this trend establishes itself it becomes politically difficult to arrest.