When Ben Bernanke uttered the words “fiscal cliff” in February, he unleashed a wave of “fiscal cliff” debates that now dominates the headlines.
Ben Zimmer, the language columnist for the Boston Globe, tracked down the first known example of the term being used to describe a budget crisis: a 1975 Dallas Morning News item by columnist Mike Kingston on New York City’s imminent bankruptcy.
Some background: In April 1975, the city ran out of money. At one point it had to get a three day loan from banks and pension funds to meet its normal obligations. It also asked the federal government for a bailout. The White House said no, eliciting one of the most famous headlines of the 20th Century: “Ford To City: Drop Dead.”
The city was now shut out of debt markets, and ended up staring bankruptcy in the face.
This was the moment when Kingston published his column.
Here’s how it begins:
“Who hasn’t looked with horror at New York City’s financial plight?
“The nation’s biggest, richest city is about to go over the fiscal cliff if the state and federal governments don’t lend a helping hand.
“At best, it’s a lesson in misgovernment. Too much deficit spending over too long a period brought on the woes. But there’s a hysteria developing over New York’s problems that doesn’t lend itself to logic…”
And here’s what it looked like in print:
Photo: Dallas Morning News
Eventually, the state and feds did provide a version of a bailout, and the city avoided bankruptcy.
But some believe the city never learned its lesson: in the mid-90s, Standard and Poor’s accused New York City of using “one-shot gimmicks” to cure its financial problems and threatened to downgrade $23 billion of outstanding debt. As one Wall Street analyst commented, “New York is a credit that one is always worried about.”