Democrat-Controlled New York on the Verge of Bankruptcy, Experts Warn
Leading economist is warning Dems driving NYC toward financial disaster
New York's Democrat leaders have driven the city to the verge of bankruptcy, leading experts are warning.
Under the Democratic control of NY Governor Andrew Cuomo and NYC Mayor Bill de Blasio, New York City is sinking toward all-out financial disaster for the first time in over 40 years ago, according to Milton Ezrati, a leading economist.
Ezrati warns the city's liberal policies could see the city go bankrupt, as many individuals and businesses flee the city for lower tax areas and local government spending is at an all-time high.
Long-term debt has now skyrocketed to over $81,100 per household, and Mayor de Blasio is ramping up to spend an extra $3 billion more in the new budget over 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,” Mr. Ezrati, chief economist of Vested explains.
“New York is already in a difficult financial spot, but it would be in an impossible situation if we had any kind of setback.”
According to the New York Post, De Blasio has detailed $750 million in savings for the preliminary fiscal 2020 budget, but that won’t be enough to stave off a bloodbath if New York’s economy is hit by financial shocks — including a recession, which some see on the horizon — analysts warn.
But city spending, up some 32 percent since de Blasio took office — triple the rate of inflation — may need to be cut deeper, these analysts add.
The city’s long-term pension obligations have escalated, as well, as its workforce has soared by more than 33,000 in the last five years.
Other startling indicators:
- New York state — and city — are ranked No. 1 nationwide in state and local tax burden.
- Property taxes, almost half of the city’s revenue, is rising faster than any other revenue source — squeezing businesses and forcing homeowners, already hit by federal property tax deduction changes, to relocate to lower-tax states.
- The top 1 percent of New York City earners pay some 50 percent of Big Apple income tax revenue.
“New York City could go bankrupt, absolutely,” said Peter C. Earle, an economist at the American Institute for Economic Research.
“In that case, the city would get temporary protection from its creditors, but it would be very difficult for the city to take on new debt.”
According to Breitbart, 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, one of Donald Trump’s most vocal critics, blamed the president's administration and GOP lawmakers for New Yorkers fleeing the state.
“This is the flip side. Tax the rich, tax the rich, tax the rich,” Cuomo announced in February.
“We did. Now, God forbid, the rich leave.”
Cuomo’s preliminary budget proposed $600 million in cuts to money allocated to New York City.