The coming death spiral of New York City

Lion of the Blogosphere

The “death spiral” is an ill-defined term, but it’s generally applied to situations where, when things get worse, this causes things to get even more worse than before.

The NY Times recently published an article about a coming public transit death spiral. In other words, loss of revenue from lower ridership means that, in order to balance their budget (absent a massive infusion of outside monetary support), they need to cut service, increase fares, reduce capital improvement, all things which make the transit system even worse thus causing even lower ridership with corresponding lower revenue.

New York City as a whole is in the same unavoidable death spiral. Rich people are fleeing to the Hamptons, and businesses are abandoning their expensive Manhattan office buildings and telling everyone to work from home. This resulting loss of tax revenue means that NYC will have to slash spending and/or raise taxes…

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