Economic and demographic factors in the fiscal crisis

Economic and demographic factors in the fiscal crisis. In 1975, New York City experienced a fiscal crisis. What were some important economic and demographic (population) factors that contributed to the fiscal crisis? How did the city’s business community use the fiscal crisis opportunity to demand new governing priorities? What were some negative outcomes of the fiscal crisis and who was impacted?

In 1975, New York City witnessed a fiscal as a result of economic and political changes that resulted in overspending and hence possible bankruptcy. As a result of trying to maintain a broad local welfare state, New York City finances were being jeopardized. Moreover, since 1970 the city had been going through economic problems as a result of industrial decline and fights between middle-class people (Phillips-Fein, 2015). Although the city tried to borrow money to cater for the widening budget gap, most of the banks declined to market the debts. The mayor at the time, Abraham Beame and Hugh Carey sought help from Washington, DC with the explanation that ailing corporations which had previously obtained government funds were straining the city (Phillips-Fein, 2015). However, the appeal was rejected but after several efforts, the city was saved by winning approval for tax hikes from the legislature.

Economic and demographic factors in the fiscal crisis

During that period, most people assumed New York had reached a state where it would not be redeemed to becoming a flourishing city. However, the business community used the opportunity to demand better governing that has helped shape the state of the city today.  The fiscal indicated that there was a need to solve the New York money problem which entailed making the economy grow (Nussbaum, 2015). Consequently, a commission was made to study the economy and tax proposals to measure effectiveness. Additionally, they managed to make New York a city oriented towards private investment (Nussbaum, 2015). The crisis brought about negative effects and the most significant was a loss of jobs. a lot of people in the middle and lower class depended on jobs in the factory which were no longer available. Consequently, there was a rise in the number of poor African Americans living in the city. Moreover, tax rates became high making life in the city difficult.