What Would Have Happened If New York Went Bankrupt?

[DAv]

So, New York in the 1970's was going through a bit of a rough patch. Various long running social and economic issues were coming to the fray, including the city's finances that reached their nadir in the mid-70's with huge reforms needing to take place before the city could avoid bankruptcy. The risk point came in 1975 when unions had to hand over money in order to help finance the city and President Ford was reported to be reluctant to give any bailout. At the end of it, New York managed to pull through and avoid bankruptcy, while slashing the budget across the board.

But what if it hadn't? What would have happened if the city had failed to convince the unions, or another outcome, that led to it being forced to declare bankruptcy? What would have happened to the city in that eventuality?

 

[DAv]

So, just try another angle. What would have happened to Ford if he had refused to bail out New York? From what I can gather, he was initially reluctant to do so and it took some effort before he changed his mind. If he refused the eventual plan to help out the city, what would the general reaction be and what impact would it have on his re-election?

 

[CaptainCalvert]

1970s is likely too early to be bought out by a Japanese consortium or arab oil sheikh?
If it can keep struggling on until 1980, under an extremist Reaganist goverment dominated by a few influential ultra-libertarians (not sure where from, but it's not like you'd need ones who think Ayn Rand is a closet socialist, just very outspoken libertarians) they might just use it to make a point that the Federal Government does not reward failure and that the market offers the only acceptable solution.
Plan B, Disney buys it, replaces the city with Dis-NY theme park (retaining a few choice structures and reproducing the rest bigger, beter and brighter).