You're right, the feedback loop isn't as strong. Basically, I'm hoping the bankruptcy can spur political change. Ideally, after a couple of years of being run by a bankruptcy judge, and residents feeling the sting of things being cut, new blood comes into city management and takes advantage of the stabilized financial position to put the city on a course for the future. I think even if the bankruptcy process can't bind the city government in the future, it does change the political climate. I think it will weaken the public unions, and I think the end of easy money through bond issuances will force greater fiscal discipline.

This might be overly optimistic.