If there was ever hard evidence that people are the drivers of wealth generation, current day Detroit is it. It also provides evidence that manana faith based economics paves a road to financial catastrophe. Detroit is showing where Greece will end up down the road.
Stephen Henderson's article in the the Detroit Free Press "Detroit's clock is striking midnight" is a sobering account of the end game for a city which has failed to come to grips with a culture which made promises it could not keep. Detroit now finds itself incapable to funding the most basic of services and even if they completely stopped delivering services to current residents and succeeded in maintaining their tax base (not a likely proposition), they could not meet their pension and health care obligations to their retirees.
The federal government has been trying through a variety of mechanisms to take the pressure of states such as California, Illinois, and New York using underwriting of bonds to forestall the inevitable. If states used this backstopping to to create a window of opportunity to get their respective houses in order, it might have dampened the blow. However, all this has accomplished is to allow states to avoid having to come to grips with their pension and entitlement pathology.
The lesson is clear from Detroit. Promises that you cannot afford + no growth environment + changing demographics smaller workforce = financial calamity.