Obviously market forces and public policy choices can't be ignored in this saga, but they can't totally explain it, either. I base this on the fact that when we say "Detroit is bankrupt", we mean Detroit, not the metropolitan region. For example, my birthplace, Rochester, MI, has a million dollar McMansion on every ugly corner. While they lack many things in Oakland County (imagination and culture, mostly), money is not counted among them. If this were purely a market story, then we would expect the region as a whole to be dead weight, but it isn't. I'm not saying that I know better than anyone else what the hell happened here, but my personal opinion is that the story in complex and nuanced, with no single answer sufficient to explain all of our myriad problems.
Tax cuts are necessary. Ever seen a property tax bill in Detroit? It's about 90 mils or something ridiculous. And what do we get for that incredible amount of cash? I'm not sure, as I've yet to see a return. I love Detroit, but as one of the city's very few residents with a high tax bill (property and income), it annoys the hell out of me to see wasted money. The only thing that will "save" Detroit (not sure I even know what that means) is more residents like me, residents who have civic responsibility and are willing and able to pay high taxes. The only way to get these hypothetical people to move to the city is for it to be attractive to them. Getting big and small businesses into the city (which is actually already happening at a decent clip) is probably the only way for this to happen. Until such time as there is a drastic overhaul of the tax code, targeted tax breaks are the only thing that will work.