When he's not playing soccer with teens, riding bikes to school on Brooklyn bike lanes, or singing to preschoolers with Obama, the most charismatic politician in the country has erased a $12 billion debt and balanced the budget.
As thatrobguy has posted, a large portion of this funding was covered by teh state.
That said, the fact that he has brought it up AND introduced some big ticket help for workers, shows it can be done.
And to provide a little more background on that...
The details:
--$8 billion in total state assistance over two years (Hochul/Albany), including $4 billion in new gap-closing support — $352 million in direct aid, $3.2 billion from programs requiring state authorization, $500 million in new revenue.
--More than $1 billion in savings came through delaying the state's mandated cap on class sizes. (delaying the enforcement of a self-imposed rule that was going to create part of the deficit, and then claiming it as a savings, is a bit of the creative accounting)
--$2 billion+ from pension amortization (restructuring payments — i.e., kicking them down the road).
So the bulk of the deficit closure came from state aid and accounting changes, not from Mamdani's own cost-cutting or revenue generation.
So to say he's "erased the debt" would inaccurate.
As far as his personal contributions to that $12 billion figure, it's a much more modest number, and still theoretical in terms of whether or not he'll be able to pull it off.
Infographic from the NYC government:
I would say it's a 50/50 in terms of that $947M line item.
And as far as the line item above discussing "managing overtime" (for the public sector union employees), that's likely to die on the vine.
He is a living example of what a democratic socialist can do to turn around the greatest city in our country..
We already knew what a socialist can do - We knew that from the eastern bloc nations back in the 80s
What they can do is:
1) Leverage previous funds that were accrued under capitalism
2) Lean on other larger entities to fill gaps
3) Kick the obligation can down the road as far as possible in order to free up funds for social programs now
...but once you burn through the stockpile of money that built up previously under capitalism, and the bigger entity can no longer afford to bail you out, and the can can't be kicked down the road any further, that's when the rubber meets the road.
Hence the reason why those nations started folding once they ran of "old money" to redistribute, and when "Big Brother Russia" could no longer afford to keep subsidizing them.
To me, having to rely on outside sources for 2/3 of a deficit closure (and having to restructure debts to kick the can down the road) indicates the opposite of anything resembling a self-sufficient system.
Pension amortization is a particularly risky endeavor (especially when used as a way to free up money and lines of credit to buy more stuff now)
...tantamount to getting a credit card consolidation loan with a 20 year term to pay down my credits cards tomorrow, in order to be able to buy more stuff on said credit cards immediately. Because then people end up in the situation where they eventually have the same credit card payment they had before, PLUS that debt consolidation payment on top of it.
The city's unions aren't necessarily keen on this plan
The city’s five municipal pension funds are partly controlled by union representatives who aren’t jumping for joy at the idea of delaying payments.
www.cityandstateny.com
