As many as 35,000 jobs on Wall Street alone are expected to be wiped out, and the rippling effect from the financial crisis goes on and on. The new comptroller’s report shows a weakening economy in New York City that will take years to come back.

The turbulence of the past several weeks on Wall Street and the credit crisis will lead to job losses in the city at an alarming level.

On Tuesday night Comptroller William Thompson projected massive job losses over the next two years — a dire projection showing the money meltdown having a major impact on Wall Street and beyond.

“One hundred-sixty-five thousand jobs in the private sector,” Thompson said. “It’s not just those who are making hundreds of thousands or millions of dollars a year as investment bankers or analysts. It’s the small people who are working in the kitchens and other places. This includes them.”

To stabilize the economy and end the crisis, a drastic step has been taken by the federal government. It will take a $250 billion ownership stake in the nation’s banks. Half of that money will be invested in nine of the country’s biggest banks.

“These measures are not intended to take over the free market, but to preserve it,” President Bush said Tuesday.

And the government wants the money back with a 5 percent dividend to taxpayers for the first five years. Banks must also agree to limits on executive compensation. In other words, there are to be no more golden parachutes.

“Government owning a stake in any private U.S. company is objectionable to most Americans, me included,” Treasury Secretary Henry Paulson said.

The government also agreed to guarantee loans between banks, but one expert told CBS 2 HD there are no guarantees about the plan’s success.

“No one is sure it will work,” said Paul Krugman of Princeton University. “And there will be manic depressive markets as people wonder.”

Add to the tough news, city tax revenues. They’re expected to tank further than the projected $2.4 billion shortfall. The tanking real estate market is being blamed there.

(Source: CBS2 HD)