Zohran Won Main Street—Now He Must Face Wall Street

Mamdani will face a looming threat to his progressive agenda: debt

The political left won big last night. Zohran Mamdani, who is just 34 years old, will become the next mayor of New York City. Yes, y’all, it really happened — you can unclench your jaw and celebrate.

Throughout Mayor-Elect Mamdani’s grassroots campaign, establishment Democrats were baffled — and even disgusted — by his success (brief reminder that days ago, House Minority Leader Hakeem Jeffries (D-N.Y) answered “no” when asked if Mamdani was the future of the Democratic Party, and Senate Minority Leader Chuck Schumer declined to endorse Mamdani through Election Day). Was it Zohran’s stellar media strategy that drew attention? His youthful energy? A bench of DSA (Democratic Socialists of America) volunteers? Well, those assets certainly didn’t hurt.

But let’s get real: Mamdani campaigned on widely popular policy ideas — plans that resonated across the entire working class electorate, such as rent freezes and rent control, free and faster public transit, child care for all and standing up to President Trump. Oh, and don’t forget his commitment to arresting war criminal Benjamin Netanyahu.

Zohran Mamdani, a self-identified democratic socialist, has done the impossible by winning a powerful executive seat in the backyard of billionaires. But now, he has an even bigger task at hand: debt.

Zohran Mamdani photographed by Kara McCurdy

This may sound basic, but it’s worth repeating. The federal government prints its own dollars — it doesn’t need to borrow from anyone to function (despite currently not functioning). Cities, on the other hand, cannot print their own dollars. Much like you — a person that probably has some student or medical debt, a mortgage, credit card debt or an auto loan — municipalities must too borrow money they do not have if they want to spend more than they tax. So what does that mean? Cities are forced to borrow from Wall Street to do nearly everything — from building parks and schools, to staffing libraries and hiring bus drivers, to patching roads and strengthening bridges.

Wall Street’s Grip on “Public” Money

Let’s use New York City as an example of how debt entraps entire cities, and thus communities. In New York City, the local government spends nearly $4 billion a year on interest payments to Wall Street alone. Imagine if the city had four extra billion dollars per year — imagine the housing that could be built, the healthcare that could be provided, or the climate resilience upgrades that could be made to the subway.

Like all state and local governments in the United States, New York City funds its public infrastructure and social programs by borrowing from the municipal bond market, a system worth more than $4 trillion.

This market allows cities to access credit while investors buy bonds and collect tax-free interest. So, even though we may think of these projects as “public,” Wall Street is deeply entangled in them.

Here’s the catch: before any tax revenue can be spent on public programs like rent control or free transit, the city must first pay back Wall Street. That means private financiers effectively hold veto power over social policy. This means they get to decide what governments can and can’t provide to their people.

From 1945 to 1975, New York City had a thriving welfare state. We’re talking free public education, municipal hospitals, and subsidized transit. But the 1975 fiscal crisis changed everything. In exchange for private loans, the city was forced to impose harsh austerity measures, slash public programs, and lay off thousands of workers.

For decades, banks and the investor class have used debt as a weapon, a way to extract wealth and enforce austerity while the public loses access to essential services.

Michael Beyea Reagan, a professor at Rutgers University, sums this up well in a recent Op-Ed for In These Times:

“Wall Street [has a] stranglehold on city finances. With private financing necessary for public programs, the private sector has the ultimate veto over social policy. It can simply close the purse. When public programs are financed through the private sector, banks hold the ultimate veto power. This is what happened in the fiscal crisis of 1975, when Wall Street locked the city out of the credit market and forced New York to make cuts to the satisfaction of the banking sector. And this had happened before, in 1933, at the height of the Great Depression, when the ​“bankers’ agreement” closed credit markets on the city and forced austerity on municipal spending. This is the structural veto that Wall Street holds over our very democracy.

This is not to say that these obstacles are insurmountable, or that the hope of progressive reforms can never be achieved in the United States, or at least in New York City. Indeed, Mamdani may be savvy enough, may have the popular support he needs, may benefit from an organized working population that can force through these reforms and the financing necessary to pay for them. It is to say, however, that in a capitalist democracy, capital holds all the cards. Electing a single, lone, progressive politician is not enough to discipline the rich to pay for what all we need.

The Debt Dilemma for Mamdani, Progressives

We think Mamdani may inherit a city-wide budget problem that existed before him, similar to the budget crisis that Chicago Mayor Brandon Johnson faced. David Backer touched on this dynamic in a piece published a few days ago:

“Like Mamdani, [Johnson] came out of an ascendant left coalition of organizers, unionists, and socialists of all kinds. Johnson’s victory was seen as a defeat of neoliberalism and austerity, just as Mamdani’s promises to be. Yet despite ideological and political alignments across the mayor’s office, Board of Education, and union leadership, Johnson had to put on the straitjacket, inheriting a perennial budget crisis where bonds played a crucial role.”

Mamdani, just like Johnson, and other popular leftist mayoral candidates like Katie Wilson in Seattle, will all face a common threat: debt from Wall Street and the strings that come with it. This structural challenge, addressed head on by campaigns like #CancelWallStreet, could prove to be even more difficult than winning an unthinkable race.

Take this example: the New York City public school district is in massive debt because of neoliberal policies from previous administrations. The district isn’t properly funded, and thus must rely on loans from creditors to make up for gaps. Mayor-Elect Mamdani is inheriting this situation — he didn’t create it. To put it bluntly, the debt service payments owed to Wall Street is a form of racialized extraction. Money that should be spent on New York City schools, students, and teachers is instead sent to Wall Street lenders and creditors. Creditors and credit ratings agencies will apply pressure on Mamdani to “reign in costs” and be “fiscally responsible” by making austerity-based cuts or being conservative with school funding at a time of broad right-wing attacks on education.

What we must do now is help Mamdani in his fight to generate more revenue for New York City schools and against the forces that will call for brutal austerity. It would be wise for him to work alongside a debtor’s movement powerful enough to challenge Wall Street directly, to demand that it loosen its grip on our cities, our public institutions, and our collective future. In fact, this is an opportunity for all mayors exhausted with the false choices Wall Street has “provided” to us to join forces in illuminating the capitalist grip on our cities — especially in advance of centrist and right-wing attacks against progressive policy agendas.

We can negotiate debt payments in the favor of debtors. In fact, Mamdani knows this well from playing a major role in the fight for New York City taxi drivers. But until we confront the role of unjust debt as a mechanism of control, even the most progressive policies will keep running into the disparaging debt obstacle.