New York liberals will never learn. They always think that money is unlimited and they spend and spend and spend.
I was reminded of this truth by today's developments regarding healthcare in New York. First, Mayor DeBlasio announced that New York City would begin to provide healthcare for those who cannot afford insurance and for illegal aliens as well. The initial cost estimate is $100 million per year, but it will likely be much higher once the plan is in place. Care will be available free through the City hospital system for the most part. Of course, that system is projected to run a budget deficit of 1.8 billion dollars per year in the near future. Adding additional patients will make the system's losses less according to DeBlasio. Really, he said that. There won't be much additional money, if any, but there will be many new patients, and that is supposed to save money. It's as if DeBlasio really thinks that the old joke is true: a business loses money on each customer but claims it makes up the losses due to higher sales volumes.
Second, the NY state legislature is taking up a proposal for universal healthcare in the Empire State. That will mean a huge increase in taxes in NY. It will also mean that a great many people and companies that can move elsewhere will do so. Just imagine how New York City will fare if suddenly companies that employ half a million people move elsewhere. New York has a vibrant economy, but it cannot withstand that sort of blow. The end result will be even higher taxes on those who remain.
A little over 40 years ago, New York City went through its financial crisis. High spending and high taxes were driving people from the city. Tax revenues were falling and New York had lost about a third of its corporate headquarters in the previous 15 years. The City asked the federal government for a bailout, but President Ford said no. As a result, the City had to cut back on its bloated spending. City employees were cut by about half but somehow the same level of services were provided. It took another 15 years for the economy to recover, but finally New York did. For 20 years under mayors Giuliani and Bloomberg, city finances were carefully managed. Sure, the city wasted money just like all governments, but there were no huge local giveaway programs put in place. DeBlasio has changed all that. He is spending like the proverbial drunken sailor. Add to that the spending pushed by the moronic governor Cuomo and his corrupt administration and it is a recipe for disaster.
Sometime soon, unless NY changes course, there will be a downturn in the national economy and a catastrophe in New York state and city. Both city and state revenues are highly cyclical since the industries that power the NY economy are more susceptible to national economic conditions than most. If both the city and state run short of funds in dramatic fashion, New York could soon find itself turned into the new Detroit, a half populated shell of its former self. There's too much economic activity centered in New York for the city to be totally wiped out in the way Detroit was. On the other hand, upstate New York (which has already decayed for decades) could receive a death blow in the next recession.
This may be good news for states like Pennsylvania (the closest major low-incomes-tax state near NY), Texas and Florida (both of which have no income taxes). That will be a small consolation for those who are left to deal with the mess that Cuomo and DeBlasio are rapidly enlarging.
I was reminded of this truth by today's developments regarding healthcare in New York. First, Mayor DeBlasio announced that New York City would begin to provide healthcare for those who cannot afford insurance and for illegal aliens as well. The initial cost estimate is $100 million per year, but it will likely be much higher once the plan is in place. Care will be available free through the City hospital system for the most part. Of course, that system is projected to run a budget deficit of 1.8 billion dollars per year in the near future. Adding additional patients will make the system's losses less according to DeBlasio. Really, he said that. There won't be much additional money, if any, but there will be many new patients, and that is supposed to save money. It's as if DeBlasio really thinks that the old joke is true: a business loses money on each customer but claims it makes up the losses due to higher sales volumes.
Second, the NY state legislature is taking up a proposal for universal healthcare in the Empire State. That will mean a huge increase in taxes in NY. It will also mean that a great many people and companies that can move elsewhere will do so. Just imagine how New York City will fare if suddenly companies that employ half a million people move elsewhere. New York has a vibrant economy, but it cannot withstand that sort of blow. The end result will be even higher taxes on those who remain.
A little over 40 years ago, New York City went through its financial crisis. High spending and high taxes were driving people from the city. Tax revenues were falling and New York had lost about a third of its corporate headquarters in the previous 15 years. The City asked the federal government for a bailout, but President Ford said no. As a result, the City had to cut back on its bloated spending. City employees were cut by about half but somehow the same level of services were provided. It took another 15 years for the economy to recover, but finally New York did. For 20 years under mayors Giuliani and Bloomberg, city finances were carefully managed. Sure, the city wasted money just like all governments, but there were no huge local giveaway programs put in place. DeBlasio has changed all that. He is spending like the proverbial drunken sailor. Add to that the spending pushed by the moronic governor Cuomo and his corrupt administration and it is a recipe for disaster.
Sometime soon, unless NY changes course, there will be a downturn in the national economy and a catastrophe in New York state and city. Both city and state revenues are highly cyclical since the industries that power the NY economy are more susceptible to national economic conditions than most. If both the city and state run short of funds in dramatic fashion, New York could soon find itself turned into the new Detroit, a half populated shell of its former self. There's too much economic activity centered in New York for the city to be totally wiped out in the way Detroit was. On the other hand, upstate New York (which has already decayed for decades) could receive a death blow in the next recession.
This may be good news for states like Pennsylvania (the closest major low-incomes-tax state near NY), Texas and Florida (both of which have no income taxes). That will be a small consolation for those who are left to deal with the mess that Cuomo and DeBlasio are rapidly enlarging.
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