If you can't discharge the debt the only alternative is to pay it. Where is Detroit going to get $20 billion, the Federal government? If that happens you will see a huge wave of state and local bailouts. There is no chance Detroit can increase tax by $20 billion so that option is out. There is something like $1.7 trillion in state unfunded liabilities and the US government has $120 trllion. Where is this money going to come from?

Are we prepared to take this scenario to its logical conclusion - currency collapse, or are some people just not going to get the money they were promised?