London has the centralized UK government to pony up the money (for now).
It’s interesting to consider an alternative reality in which New York had won the Games and was now stuck in the same situation.
At worst, we’d be stuck at the worst possible time shoveling a shrinking pile of money into outright boondoggle projects like our own Olympic Village. We’d also have less flexibility to switch funding commitments from good but low-priority infrastructure projects like the #7 subway extension. This project is probably the least important of the MTA’s capital projects, in light of the authority’s need just to maintain core capital and to complete vital expansion projects like the 2nd Avenue subway.
At best, we’d benefit from a federal bailout of our own funding commitments to the Olympics — but the feds likely would cut our “stimulus” money by the same amount.