WILL THE NEW YORK STATE GO BANKRUPT?

When a company goes bankrupt, it is generally accepted by everyone as a normal procedure for a business that finds itself in a difficult financial situation. But when the threat of bankruptcy hangs over a city, a separate region or even a state, the serious concerns begin to arise. This is precisely the situation that takes place in the United States, where one of the leading states, New York, is under the threat of bankruptcy.

The clash of the two main political parties of the country against the backdrop of the coronavirus pandemic demonstrates the struggle for survival, in which the question of bankruptcy of a city or state becomes a bargaining chip. The other day, the American media reported that a number of states, including New York, might go bankrupt in the nearest future. This idea was expressed by a Republican politician, Senator Mitch McConnell. In his opinion, the state leadership should resort to bankruptcy if it cannot cope with the situation on its own.

McConnell opposed the idea of sending financial assistance to those regions and cities, that were most affected by the effects of coronavirus.

The billions of dollars that the Democrats proposed to send to the states, the head of the conservative majority called salvation "at the expense of the future generations."

We should recall that it was New York that has been previously recognized as the main area of the spread of COVID-19, a pandemic which literally swept the United States, putting it in first place in the world in terms of the number of infected people.

Andrew Cuomo, the Governor of New York, commenting on his opponent’s speech, described his statement as sad and thoughtless. He warned that in case of refusal of assistance, the bankruptcy may occur not only in the state that is under his administration, but in all other states as well. Cuomo's appeal for help to the head of the White House is understandable. In New York, as in many states, mass protests are taking place against the quarantine measures, announced by the authorities.

The participants of the protests believe that quarantine causes more harm than the disease itself. At the same time, the number of deaths in the state is constantly growing and for many people, these figures are horrifying.

Curiously, experts predicted a bankruptcy of the New York state a few years ago, long before the COVID-19 epidemic. Then it happened due to the budget deficit amid a possible recession. The problem of New York was the increase in expenditures of the population of the metropolis in a situation where many companies left the state due to excessive taxes. But the bankruptcy did not happen, and Andrew Cuomo even cut the expenses.

It was rumored that the situation could be a disaster if unexpected difficulties arose. It seems that now they have happened. Will the White House support the state, or will the political dividends be more important for the conservatives in the current situation than the economic results? The answer to this question will not be given soon, since the authorities of New York do not plan to cancel the quarantine measures yet.