BLOOMBERG WARNS - AT 2:46 P.M. ET:  From AFP:

Sweeping layoffs of government employees are needed to prevent New York going bankrupt, Mayor Michael Bloomberg said Thursday.
Bloomberg, who is in tense negotiations with municipal workers' unions, said an extra 7,000 jobs would have to go unless major reductions are made in employee benefits.

"We cannot continue. Our pension costs and health care costs for our employees are going to bankrupt this city," he said in comments broadcast on NY1 television.

Bloomberg, running for a third mayoral term at the end of this year, said that proposals from unions so far were "nowhere near what is adequate."

COMMENT:  There was a time, in the sixties, when one in eight New Yorkers was on the public rolls, in one way or another.  It's better now, but conditions in New York are deteriorating.  The city depended heavily on Wall Street for its tax base, and that's been badly damaged.  I would trust Bloomberg on this.  He isn't an alarmist.  If New York goes bankrupt, the psychological effect on the economy could be substantial.

April 9, 2009