Deep blue New York City looking at bankruptcy after a five-year socialist wallow

Ready to go back to the 'Shattered' era, New York? The old 'drop dead' epoch and 'fun city' times?

Looks like that's what's on the cards, based on this New York Post report, warning that the socialist-led city is in dire danger of bankruptcy if there's an economic downturn:

New York City is careening closer to all-out financial bankruptcy for the first time since Mayor Abraham Beame ran the city more than 40 years ago, experts say.

As tax-fleeced businesses and individuals flee en masse, and city public spending surges into the stratosphere, financial analysts say Gotham is perilously near total fiscal disaster.

Long-term debt is now more than $81,100 per household, and Mayor de Blasio is ramping up to spend as much as $3 billion more in the new budget than the current $89.2 billion.

“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,” said Milton Ezrati, chief economist of Vested.

I've got some news for New York: The New York Fed is forecasting just that downturn. Here's a Daily Mail report that ran a few days ago:

The US economy is likely to slow 'considerably' in 2019, the president of the New York Federal Reserve Bank warned on Wednesday.

Amid a time of economic uncertainty, John Williams said the Federal Reserve may 'wait' before raising interest rates again.

The Fed may or may not be right about this, but it shouldn't take the spotlight off New York. 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.

And now the famous Other People's Money is running out, which is likely to signal the demise of the socialism itself if it can't keep a money stream from the productive sector with which to shovel out the socialist welfare. It shows that socialism is a parasite system, always needing some kind of sugar-daddy to glom off on - whether it's Castro in Cuba seeking a new patron every few years or de Blasio seeking a new corporate sponsor to keep the tax money rolling in. Yet once socialism kills its host as the cash runs dry, the collapse commences.

Anybody out there could see that that was what was going to happen.

As I wrote back in 2013, when I was an editorial writer for Investor's Business Daily:

Largely appealing to identity politics to win (his Italian name is of his own making and his African-American wife and children have been paraded as political props), the only thing that passed for a political plan from him was his vow to "tax the rich," to end the policing that has made New York safe, and to expand welfare.

"Make no mistake: The people of this city have chosen a progressive path, and tonight we set forth on it, together," de Blasio said on his election night.

Problem: These are ideas that have been tried before — in New York's recent past. The rubble of the South Bronx, the crime waves Mick Jagger sang about, and the municipal bankruptcy from which Gerald Ford told New York to "drop dead" rather than rescue, were all the result of corruption and incompetence, which were reversed with the election of Rudy Giuliani in 1993.

Well, now that specter is appearing, and it came in all of five years.

Will New Yorkers and others enamored of socialism ever learn from this? Maybe that's the question to start seeking answers about. How bad does it have to get and why must it always get bad for anyone to wake up?


Image credit: Ludovic Bertron, via Flickr // CC BY-SA 2.0

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