Detroit bankruptcy adviser: More U.S. cities to go bankrupt

Detroit's bankruptcy is not an isolated case of fiscal mismanagement of a city in decline, according to the man advising the judge handling Detroit's bankruptcy case.

More U.S. cities could be heading towards bankruptcy, Richard Ravitch, a former Lieutenant-Governor of New York said in an interview on CBC's The Lang & O'Leary Exchange.

"What we have to worry about is that cities in the states are running into increasing fiscal emergencies," Ravitch said.

He notes that expenditures, particularly pensions and employee salaries, are growing much faster than state and local tax revenues, causing budget stresses that cities are increasingly unable to deal with.

Ravitch said one of the main problems he sees in municipal budgets is the sale of assets to pay for operating costs.

"It's like paying for your dinner by selling your furniture. Ultimately, it's not sustainable," he said.

Ravitch helped guide New York City through a fiscal crisis in the 1970s.

Watch the full interview with Richard Ravitch in the link above.