Sunday, August 2, 2020

Who Will Bail Out New York?

Like most blue states New York is going broke. It probably is broke already, but don’t tell anyone. As Francis Menton explains in an excellent post on his Manhattan Contrarian blog, the truth is, New York needs a federal bailout.

All the negotiations about coronavirus relief will eventually boil down to the Democrats desire to bail out blue states. If you want to know why it is so vitally important that Joe Biden assume the presidency come this January, the reason is: blue states are about to fall into an abyss. Only the federal government can save them. That means: the citizens of fiscally responsible states.

Menton’s analysis is worth your attention:

The blue state progressive political model consists of an endless list of government spending and redistribution programs, expected shortly to deliver perfect fairness and justice among all people, all financed by an assumed ever-increasing gusher of tax revenues. Then along comes the coronavirus: the productive economy gets intentionally suppressed, tax revenues plummet, and then what? Are we now expected to cut back on the government programs so recently touted as the sine qua non of human moral advancement? Worse, are public servants — those selfless individuals giving their lives to the righteous cause of human advancement through government spending — now to be laid off? Or have their pay or benefits reduced?

All of the blue states are currently facing this circumstance to greater or lesser degree, but none more so than my home state of New York. A June Report from researchers at Arizona State and Old Dominion Universities, cited at Bloomberg here, projected an annualized average decline in tax revenues among the states of 20%, but with New York leading all states with a projected 40% decline in tax revenues. Even if the decline turns out to be well less than the 40%, we’re still talking about a large part of the support for most-expensive-in-the-nation spending programs in areas like Medicaid, housing, and K-12 education. What’s the plan, Governor Cuomo?

The virus has been a catastrophe for these states, especially New York. And that’s not even considering the numbers of people that Gov. Cuomo consigned to an early death by sending coronavirus patients to nursing homes.

Menton concludes:

Good New Yorker that he is, Cuomo’s brain is just incapable of contemplating substantial cuts to state spending or the state workforce, even in areas like Medicaid and K-12 education where our state spends double or more per capita the average of the other states. Nor are meaningful tax increases really an option — we’ve basically already maxed out on the potential for squeezing big money out of a handful of the richest citizens. So there’s really only one option: the federal government just has to step up and pay our bills.


urbane legend said...

Mr. Trump, please say just one word, " No. "

Sam L. said...

"As Francis Menton explains in an excellent post on his Manhattan Contrarian blog, the truth is, New York needs a federal bailout." There should be NO (N. O.) federal bailout. New York did it to itself. It/they will have to dig themselves out of the pit they dug themselves into. The stupid: it BURNSSSSSSSSSSSSSSSSSsssssssssss.

Sam L. said...

Good money (if ANY) after bad????? I'm with "u l" above.

370H55V said...

Let's hope we see this headline in the Daily News soon: "Trump to City: Drop Dead"

Anonymous said...

I have no problem with devolving NY to a territory.

Sam L. said...

The very wealth will likely bail out OF NYC. Unless they're masochists.

Anonymous said...

Remember when Thatcher said that the problem with socialism is, that sooner or later you run out of other people's money?

Guess what?

But it's not just covid. We live in an age of multi-billionaires. I like our system, but some of that needs to go for things other than more mansions OR tearing down America and promoting globalism. There have to be some laws about, if you're a billionaire, you can't just make another 20 million by moving overseas---you owe something back to society.

Used to be called noblisse oblige (noblesse?) and taken for granted. Now we taken people with 50 billion dollars for granted, which, when you think about it, is just as crazy as spending other people's money with abandon, as blue cities do.

There has to be an inbetween. If we had a real congress, rather than Pelosi and some attorney-lobbyists writing the few laws we have (I read that 90% of them are regs put out by bureaucrats, not laws)....that might help. But I'm kinda stuck.

All those dystopian novels? Well, here we are, George, just like you said. Wish we at least had soma, as in Hunxley's version...

P.S. PDT was going to bring us back (with all of us working toward it) but the immature and power-hungry left was so determined that (stomping foot) "NO! You WON"T have a good time like we had under obama! NO!" that they decided to ruin it all for spite...

They could stop this BS in a day if they could get past the brainwashing that they MUST hate this guy they've never met and really know little about...Ah, and that brings us to what is laughingly called "the media," spinning their spin...Well, too big a problem for me tonight, but I am enjoying binging on your site after not being here for awhile.

Keep up the good work---- your retired teacher fan with PTSD