The other day, I attended a dinner at New York’s Plaza hotel organised by a group called the “Citizens Budget Commission”. To the irreverent British observer the name sounds improbably earnest, however New Yorkers (to their credit) take citizens’ commissions seriously. My fellow diners were a host of luminaries including Ben Bernanke (the solemn, bearded Federal Reserve chairman) and Michael Bloomberg (New York’s mayor), who discussed the tidal wave of debt that is now engulfing the US.

The person who had arguably the most interesting tale to tell, however, was Felix Rohatyn, an 82-year-old New Yorker. These days, Mr Rohatyn spends his time advising Lazards bank. But 35 years ago, he spearheaded a group of New Yorkers charged with “saving” the city from default. As we sat in the Plaza ballroom, I asked Mr Rohatyn to explain how he and his team had pulled off that particular trick.

His story is both inspiring and alarming. Back in 1975, Mr Rohatyn explained (and you can read it in his recent book Dealings), New York was in a parlous state: crime was rife, the infrastructure was crumbling and the city was drowning in debt. When asked to step in, Mr Rohatyn’s first reaction was despair – the unions and politicians were at such loggerheads it was impossible to create a credible austerity plan.