by Jenn Carter
New York City is headed for financial ruin and could go bankrupt for the first time in 40 years, financial experts say.
Financial experts predict that there are already signs the city is headed for financial disaster, as many individuals and businesses are leaving the city for lower tax areas and city government spending is at an all-time high.
The last time the city came close to filing for bankruptcy was in 1975 when former President Gerald Ford refused to give the city a bailout package to settle its debt.
“The city is running a deficit and could be in a real difficult spot if we had a recession, or a further flight of individuals because of tax reform,” economist Milton Ezrati told the New York Post. “New York is already in a difficult financial spot, but it would be in an impossible situation if we had any kind of setback.”
How could this happen? Monica Showalter of American Thinker lays it out:
Why on earth should one of the world’s great cities go bankrupt solely because of an economic downturn? That’s the sort of thing you might expect from Greece or Uruguay, both of which endured huge financial crises based in part on the financial behavior of their much larger neighbors. New York ain’t small.
It’s also the kind of thing you expect from places such as Venezuela or Ecuador, both of which relied on one-commodity economies – oil – and saw their fortunes tumble when the price went down, having put all their eggs in one basket. New York’s no undiversified economy.
What the city does have in common with all four places through is that ‘s’ word: socialism, and sure enough, they’re looking at the same kind of crisis.
Socialist Bill de Blasio has been mayor of New York for going on six years now, and he hasn’t held back on what socialists specialize in, which is government spending. According to the Washington Examiner, the state of New York shells out 32 cents from every taxpayer dollar that comes in for welfare payments to those who can’t or won’t work.
According to the State of New York’s Office of the State Comptroller, which pays attention to New York City’s government spending, in just the last year, New York City has outspent the rest of the state in public assistance (up 3.7%), safety net assistance (up 6%), family assistance (up 1.7%), while assistance for other programs, such as SNAP, decreased at lower rates than the state as a whole on all fronts.
You can bet that New York city’s percentage is likely above the state’s averaged 32%.
And all this at a time when the U.S. has seen its best economic performance since the Reagan years.
Bill de Blasio has been spending up a storm as the socialist mayor of New York City, and with every expansion, driving out another piece of the productive sector. Instead of jobs expanding, welfare has expanding. And residents are fleeing. Amazon, after all, got chased out, thanks to his fellow socialist, Rep. Alexandria Ocasio-Cortez, a move that is going to cost the city a pretty penny in lost tax revenue. Nice work, socialists.
The city’s budget deficit has reached an all-time high over the past year. New York City’s long-term liabilities— including pensions, bonded debt, and retirement benefits for city government employees— reached a record-high $257.3 billion, according to an October 2018 Citizens Budget Commission report.
Even though the city’s budget deficit has reached record highs, Mayor Bill de Blasio has shown no signs of curbing the city’s spending.
In fact, de Blasio is adding $3 billion in spending to the current $89.2 billion budget, and spending money at a rate that is three times the rate of inflation, according to the Post.
It also appears that de Blasio will not get help from fellow Democrat Gov. Andrew Cuomo, who is trying to address a $2.3 billion state budget deficit by using auditors to bill wealthy residents fleeing the state for lower-tax regions.
Cuomo’s preliminary budget proposed $600 million in cuts to money allocated to New York City.
Will America learn its lesson for 2020 from NYC — or trust Socialists like Alexandria Ocasio-Cortez to gain even more power over the entire nation’s economy?