The 1970s New York City fiscal crisis commanded the attention of the world. The possibility that the largest city in the United States — the center of its financial industry, home to more corporate headquarters than anywhere else; its capital of art and culture — might go bankrupt became, like the proverbial car wreck, an irresistible spectacle.

Initially, the crisis was portrayed as a local story, a reflection of New York and its “mongrel” population, liberal social policies, profligate spending, and powerful unions. But the means of its resolution became a template for the imposition of neoliberal policies around the world. Ruling elites took seriously the call to “think globally, act locally,” making a municipal finance problem into an event of world significance.

Public debt — seemingly arcane and technical, yet in the end all-powerful — was at the core of New York’s brush with financial meltdown. From the 1960s on, the City’s debt ballooned, reaching $11 billion in 1974 (the equivalent of $54 billion in today’s dollars). Government played an unusually expansive and expensive role in New York life, as a liberal political culture and decades of popular struggle had led to the creation of massive public healthcare, education, housing, and transportation systems and — compared to much of the country — generous welfare benefits.