The following short but major economic change will work on any city - defined here as having a population above ~100,000 people - or state. I'll use New York City and New York state as examples.
Several publications are sounding the alarm over the fiscal year's dismal city and state pension fund performance. Here is one emphasizing New York's bond debt:
NY State rates an Aa2 but just a D rating for its " Budget Maneuvers" - i.e. borrowing habits; the second lowest score and shared by only a handful of other states.
NY City has a $252b pension fund (or "had" that anyway until recently):
Without going too deep into the budget weeds, because it's unnecessary, it's easy to show that the entire system of pensions, borrowing from the same institutions managing those pension monies, and having to put up with borrowing at all...are all symptoms of deeply flawed and corrupted thinking.
The annual NYC budget is now ~$100b. There's 2.5X that amount in the pension fund. There was $76b more at the close of last fiscal year: $326b total, according to the latest 2021 Comprehensive Annual Financial Report (CAFR) ending June 30, 2021, available online (Crains has sources I don't for the new figures).
Think about that for a moment. The loss in value in the pension fund is 3/4 the size of the entire New York City budget!
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