Should the City of San Diego declare bankruptcy to protect services such as streets, libraries, and public safety? In last week’s State of the City address, and in each of the previous four he has delivered, Mayor Jerry Sanders dismissed such talk as extremist and simplistic. Still, chronic budget shortfalls and a multi-billion dollar pension deficit leave the region’s largest city searching for a fix to its financial problems. Would bankruptcy make the city’s problems go away, or are tax increases and drastic service cutbacks the only way to make San Diego solvent?

California Western Professor Scott Ehrlich talks about the benefits bankruptcy would provide San Diego, and whether the city has the political will to take that step. Ehrlich is co-author of the recent casebook Business Planning.