Urban Bankruptcy Requires Outside Aid
In very extreme cases, where cities are unable to recover costs of serving a vast suburban hinterland and are politically controlled by a larger jurisdiction, such as Manhattan within New York state, cities may go bankrupt as New York City in fact did in the 1970s. This had been predicted by urbanists including Jane Jacobs who had fought Robert Moses and his plan for the Cross-Manhattan Expressway system which was eventually defeated. The City only recovered with federal aid and urban autonomy rights including the right to levy its own income tax which it still has.
Read more about this topic: Suburban Colonization
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