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Despite news of rich people leaving New York City, the town continues to enjoy strong economic growth and increasing family incomes. Even so, they have a 3.6-billion-dollar deficit this year, and another big deficit is forming for next year.
Why?
The city council has already refused to cut any spending. The excess spending is going to welfare programs and other social programs, such as rent assistance and homelessness. Most of the rest of the budget is non-discretionary, including required MTA contributions and overtime. Thus, there is a deficit despite the strong growth of the city's economy. New York City's problem is excessive government spending, pure and simple. And now the people have voted to spend even more to give them free stuff.
It's the same in Seattle—excessive government spending, mainly on welfare and social programs, that outpaces the city's economy in spite of fairly strong growth. And now the people have voted for even more spending.
In both cases, municipal tax revenues depend on the wealthy who pay the majority of taxes, already some of the highest taxes in the nation. And the response of both cities is to alienate and demonize the wealthy, driving them away.
Alexander Fraser Tytler, an 18th‑century Scottish historian, wrote about the cycle of democracies and argued that democracies tend to decline when voters realize they can use political power for personal gain. From this came the famous quote, "democracy will fail when the people discover they can vote themselves money from the public treasury," a line frequently misattributed to Thomas Jefferson, Benjamin Franklin, and Alexis de Tocqueville, none of whom actually wrote it.
Nevertheless, the idea holds water, and we are seeing it playing out in our cities, if not the entire nation.
Discussion (7)
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No amount of tax revenue is ever enough.
The demand for "government services" is insatiable.
I recall that there is plenty of evidence that in general increased tax revenue is followed by spending increases even greater than the increased tax revenue.
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Apparently not enough. Yet.
Something about a goose and golden eggs seems to come to mind.
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Politicians never talk about reducing spending (unless they are not in power and can do nothing about it)
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Re “increasing family incomes”
Let the record reflect that in Dec 2019 Real Median Household Income was 87,080. The most recent figure is 86,830.
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If you have a city government that takes from producers and gives to non-producers, you are going to decrease the number of the former and increase the number of the latter.
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