Mamdani as NYC Mayor Would Devastate Economy, Spike Borrowing Costs

New York City’s economy faces devastating prospects if an avowed socialist wins the general mayoral election in November.

That isn’t out of the picture, as Zohran Mamdani, winner of Democrats’ primary on Tuesday and a member of the Democratic Socialists of America, pledges to run my former home into the ground, transforming it into an East Coast version of San Francisco.

As someone who lived in New York City for nearly 10 years, it’s sad for me to witness the city’s downward spiral—a spiral that started under Bill de Blasio and which will only accelerate if Mamdani is elected.

Mamdani embraces a litany of alarming proposals like no rent collection, government-owned grocery stores, freezing rent prices, social workers to replace police, $70 billion of debt to fund “affordable” housing, and a $30 minimum wage.

He also promises “free” buses and child care—even though any honest telling acknowledges such benefits aren’t “free,” but rather a burden shouldered by taxpayers at every income level through personal income, sales, and other taxes. 

At age 33, having never personally managed an organization with any complexity, Mamdani is unqualified to run the world’s largest, most powerful economy.

He lacks a basic grasp of the economic principles like scarcity and the role of competition and innovation to drive prices lower. Instead, he’d rather shift economic production and control to government—a recipe for quagmire and bond downgrades, which would spike borrowing costs for New York City’s municipal bonds, or munis. 

In his Thursday “On The Money” email newsletter, Charlie Gasparino, a financial journalist at Fox Business, explained the problems with Mamdani’s plans to load the city up with debt:

Here’s where things can get dicey if you’re a muni holder. It’s rare but municipalities have been known to file for bankruptcy and screw bondholders. Puerto Rico did that not too long ago, same with Detroit and Orange County, Calif., back in the 1990s. NYC came close in the 1970s during the infamous financial crisis, but it avoided a full-on default.

The city’s budget under Eric Adams is pretty solid today for all Gotham’s problems. But remember defaults do occur when fiscal leaders spend more than they have.

Mamdani, if you take him at his word, wants to spend money like crazy and tax rich people and businesses so much that they will have little choice but to keep moving to Florida. It should be a recipe for default, and at least lower muni-bond prices following downgrades in ratings by bond-monitors like Fitch, S & P and Moody’s.

What’s telling is that even though Mamdani claims to speak for less wealthy New Yorkers, they resoundingly rejected him. Exit polls show Mamdani won by double digits among primary voters earning $100,000 or more, as well as among those earning $50,000 to $100,000. But Mamdani lost heavily to primary rival Andrew Cuomo—by double digits—among voters earning under $50,000.

Mamdani often garnishes his speeches with references to his life as an immigrant born in Uganda who came to the United States at age seven. But it’s striking that voters who are disproportionately poorer than average New Yorkers reject his message.

The New York City government reported, “In New York City, U.S.-born residents have significantly greater median household earnings; foreign-born residents have a median income of $42,820 while U.S.-born residents have a median income of $61,171.”

Could it be that poorer, immigrant New Yorkers had enough of the socialist scam promises from leaders in the places they fled?

New York’s dilemma isn’t happening in a vacuum. People fleeing California took more than $24 billion in income with them as the Left Coast adopted many of the same policies Mamdani seeks to implement.

Two years ago, Chicago Democrats also elected a charismatic socialist mayor in Brandon Johnson, who has since overseen masses of people fleeing Illinois for other states like Florida and Texas due to the city’s high taxes, high crime, and low respect for private property and economic opportunity.

There’s still time between now and November for all voters—not just the hard-core progressive activists who voted this week—to reject this turn toward socialism and instead choose a candidate who will bring economic opportunity, safety, and freedom to the Big Apple.

Carrie Sheffield is a senior policy analyst for the Center for Economic Opportunity at Independent Women’s Forum.

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