Bloomberg Gets a AA-
New York reached another positive milestone the other day: A major bond rater upgraded the city’s credit rating. That’s yet another sign that, thanks largely to Mayor Michael Bloomberg, the city has put the days of high crime and fiscal irresponsibility well behind it.
Standard & Poor’s, one of the three main bond-rating agencies, displayed its confidence in the city’s finances by upgrading New York’s general-obligation debt from A+ to AA-, the highest rating it has ever given the city’s main source of debt.
This is more than just a seal of approval from a respected fiscal monitor. With the improved rating, the city will be able to pay a lower interest rate on money it borrows, which means taxpayers will pay less in debt service. The higher rating also increases the pool of investors willing to buy New York’s debt.
Clearly the men and women who make their money analyzing such things are confident that New York’s fiscal house is in order. It has been a long time coming. New York’s finances didn’t improve overnight—it has been a long, hard slog since the near-catastrophe of the mid-1970’s, when nobody would buy city paper. And with good reason.
While credit for New York’s good credit can be spread around, there’s also no question that Mayor Bloomberg’s fiscal stewardship has a lot to do with Wall Street’s confidence in the public treasury. His recent decision to create a trust fund to pay for health-care costs incurred by retired city workers is just one example of the fiscal creativity that has led to this milestone.
The improved credit rating also reflects the improved prospects of New York’s working people. Tax revenues are soaring, which means people are working and earning. That’s good news for all concerned.
Mr. Bloomberg had every reason to crow about the Standard & Poor’s move, but he wisely counseled rhetorical as well as fiscal restraint. He noted that the city still had financial challenges and that his administration is pledged to achieving structural financial balance. That goal will require tough negotiations with unions over issues like pension reform.
Still, while those challenges await action, it’s nice to know that Wall Street sees New York heading in the right direction.
Pataki Gets Another F
As Mayor Bloomberg builds a legacy of success here in the city, 150 miles north in Albany, Governor George Pataki continues to build one of spectacular failure.
The cost of that failure goes beyond the damage it will do to Mr. Pataki’s ludicrous Presidential aspirations; the real cost is the impact it has had, and will continue to have, on the economic health of the state and, by extension, the city.
It seems that every few weeks comes another bleak assessment of Mr. Pataki’s stewardship of the state’s finances. Of late, we’ve had the Citizens Budget Commission’s report that New York’s state and local governments, and the array of public authorities, are in debt to the tune of an outrageous $227 billion. Mr. Pataki had some help in creating this grim abyss, as Senate Majority Leader Joseph Bruno and Assembly Speaker Sheldon Silver have irresponsibly handed out tens of millions of dollars in so-called “members’ items” (i.e., pork) to unscrupulous local legislators. Because of the Pataki legacy, billions of dollars will have to go toward debt service, rather than going toward our schools, libraries, roads and bridges, police protection and other vital services.
The latest report card detailing the fiscal recklessness of Pataki & Co. comes from State Comptroller Alan Hevesi. In a scathing analysis, Mr. Hevesi calls the state’s recently passed $112.3 billion budget “severely flawed,” noting that Mr. Pataki’s budget relies on new debt and one-shot gimmicks such as stock sales while increasing spending at triple the pace of inflation. The comptroller also criticized the Governor for inflating the estimate of the legislature’s budget by $3 billion, and for subsequently sneaking spending items back into the budget after it had been passed.
Because of such tomfoolery, the state, Mr. Hevesi concluded, will end up with a $10 billion budget shortfall over the next two years. And so Mr. Pataki’s final budget as Governor is, in the comptroller’s words, a “formula for severe problems in the future.”
George Pataki is leaving New York State far worse off than when he arrived in January 1995. He has added enormous debt through unchecked spending and borrowing, saddling generations of future New Yorkers with the burden of paying it off. This is a record that qualifies him for a long, quiet retirement.
In Sickness and in Health
Marriage may not always be a picnic, but more and more medical research is showing that a good marriage may be an essential ingredient to a long and happy life. Likewise, it seems that a bad marriage may do lasting damage to one’s physical well-being. Recent studies have shown, for example, higher rates of heart disease in people who report being unhappy with their marriages. One team of researchers even found that healing from minor wounds, such as blisters, took longer in people whose marriages were characterized by hostility. According to a new report, the connection between a happy marriage and a healthy body may be most noteworthy in one’s older years.
Published in the Journal of Health and Social Behavior, the study found that those people who reported marital discord suffered from a steeper decline in health as they aged, particularly from ages 70 to 78. Those who said they were in happy unions—saying they felt loved and cared for and listened to—showed fewer health problems. Younger couples—those in their 30’s and 50’s—showed less of a direct correlation between marital harmony and physical health. It was concluded that the usual pains of aging—lower immune function, for example—are exacerbated by living in an unhealthy marriage.