I tried looking that up, but the results were confusing. Wikipedia has this account:
The city neared bankruptcy during the administration of Mayor Abraham Beame but avoided that fate with the aid of a large federal loan. A statement by Mayor Beame was drafted and ready to be released on October 17, 1975, if the teachers' union did not invest $150 million from its pension funds in city securities. "I have been advised by the comptroller that the City of New York has insufficient cash on hand to meet debt obligations due today," the statement said. "This constitutes the default that we have struggled to avoid."[2] The Beame statement was never distributed because Albert Shanker, the teachers' union president, finally furnished $150 million from the union's pension fund to buy Municipal Assistance Corporation bonds. (President Gerald R. Ford angered many New Yorkers two weeks later by refusing an outright grant to the city, a decision famously, if inaccurately, summarized by the New York Daily News headline "Ford to City: Drop Dead.") en.wikipedia.org
But the referenced NYT article nytimes.com doesn't say anything about federal loans. On further research, though, the more comprehensive account in query.nytimes.com does mention a substantial federal role:
After President Ford rejected a federal bailout, inspiring the ''Drop Dead'' headline, Mr. Beame assailed him for denigrating the nation's premier city. And when the assistance corporation assembled a huge financing package in November, Mr. Ford supported $2.5 billion in federal loan guarantees that got the city through the worst of the crisis.
I only wish $2.5 Billion would count as significant in today's crisis, and not as a mere 15% of Wall Street's bonus budget for the year rewarding all the fat cats for the excellent job they did running the economy into the ground. |
