A key thing being lost in this discussion are the terms of any loan versus debt payments the city is already making. The city currently is carrying a lot of debt to many creditors. If the city can take a loan from the state that is longer term, lower interest, or both and use it to pay off some of the existing debt, then it will help the city's bottom line. The amount of total debt owned remains the same, but your monthly payments go down. That is an action that will help Detroit remain solvent in the short term while it hopefully solves its fiscal problems that are structural in nature. It's the same reason why people are trying to refinance their homes if they can.

I think people are too quick to shoot this down because, if the terms are right, this is a smart move for the city to make and it will give them more flexibility.