Was the stock market boom good for New York? Not according to Megan McArdle, otherwise known as ‘Jane Galt’.

in an era of prosperity, city spending grew an astonishing $5.6 billion, or 25% – right up to the capacity of record capital gains income and Wall Street bonuses to sustain it. Now that the money is gone, politicians are still spending as if nothing has changed, even though the speculative stock valuations that fueled the lion’s share of the growth are hardly likely to return. If a family member or friend were still spending money based on the value of his stock portfolio in February of 2000, we’d step in to stop it. Yet who will stage an intervention with our politicians?

For Discussion. Will New York City have to go through another bankruptcy in order to curb spending?