The second honeymoon of Mayor Bloomberg and the city of New York is in full swing after his New Year’s Day inauguration.

More than four years after the attacks of September 11th, New York City is enjoying a period of prosperity and apparent peace.

Two-and-a-half years after Mr. Bloomberg seemed to be floundering in office with a 31% job approval rating, he was returned to City Hall by a historic margin.

He is now seen as a unifying consensus figure. Neither revolutionary nor reformer, he has instead prided himself on a technocratic management style, balancing liberal social views with a pro-business bent. Blessed with generally fawning press coverage, Mr. Bloomberg embodies the meritocratic Manhattan establishment, reflected in his unofficial but uncontested position as the New York Times’s favorite mayor in recent memory.

Now comes the hard part.

Mayor Bloomberg’s 20-minute, 2,000-word second inaugural address was devoted to the theme of unity in a post-partisan New York. It had moments of rhetorical heights, perhaps most usefully offering “the tireless wisdom that the secret of happiness is freedom, and the secret of freedom is courage.” But the speech was short on articulating specific measurable goals or advancing an overarching second-term vision. Noted urban-ologist and New York City scholar Fred Siegel described it as “almost ritualistic in its blandness.”

But Mr. Bloomberg seems to understand that just more of the same is not adequate to the monumental opportunity of his moment. As he said in the speech, “We have a choice to make. We could be content with what we have accomplished and preserve our gains. Or we can take our beloved city even further forward.”

It can never be said too much that Mr. Bloomberg occupies a unique position in New York City mayoral history. As a billionaire who entirely self-funded his free-spending campaigns, he owes no political debts. As a man who convincingly claims to want no higher office, preferring a third career as philanthropist, he does not need to curry favor with special interests or make ideological decisions based on future ambitions.

In short, he is free to do what he thinks is right. More importantly, he is free to make the politically tough decisions that New York needs to meet the future as a sustainable city. That is the opportunity and responsibility of Mr. Bloomberg’s second term.

Last month’s transit strike threw matters into sharp relief – we cannot ultimately sustain the costs of supporting the largest and most expensive municipal labor force in the nation. After all, more than one out of every thousand Americans is a New York City government employee. And as the baby boomers begin to hit the age of 60, the pension crisis that will hit companies, cities, and states across the nation will disproportionately impact New York.

“There are long term problems that are simmering in the city,” explains Fred Siegel. “In Rudy’s case he dealt with welfare and crime. But when he left office there were still long-term problems that hadn’t been dealt with, namely out of control municipal labor costs, Medicaid and education. Bloomberg has made a vigorous attempt at education, but he’s barely nibbled at the others.”

Medicaid, health care costs and municipal employee pensions are “the three ticketing time bombs which are going to eat up the budget,” according to Mr. Siegel. “The question is whether Bloomberg simply kicks the can down the road.”

Future mayors and future generations of New Yorkers will thank Mr. Bloomberg if he deals with these and other difficult issues with the political capital he gained with his landslide re-election. The hard fact is that successors are unlikely to be able or willing to approach them with an eye only toward the greater good. That of course increases the importance that this moment is met with an activist’s sense of purpose. It means that Mayor Bloomberg will need to set the tone internally that this is not a time for government business as usual. He must decide that he wants to be respected even more than well-liked.

There is reason for hope – Mayor Bloomberg is a defiantly independent character who does not define himself by other people’s precedents. His inaugural address set a primary second-term goal of removing guns from the city streets. This is an initiative that a traditional Republican with an eye toward higher office would be unlikely to pursue for reasons of ideology or the influence of organizations like the National Rifle Association. Likewise, the mayor is free to further pursue his healthy instincts toward municipal political change, seen in last term’s attempt to bring non-partisan elections to New York. In the 2004 campaign he pledged a second term effort at cleaning up judicial selection, after the clubhouse scandals in Brooklyn. These are fights that traditional Democratic successors will have a tough time taking on. Dealing with the crippling long-term labor costs may be less sexy and immediately comprehensible, but it is no less urgent.

This is the moment for Mr. Bloomberg to make history. His political independence will never carry more influence than in this pivotal mid-administration year. Addressing long-term problems takes time, but time is what Mr. Bloomberg has most of, and as Harry Siegel – the new editor-in-chief of New York Press and Fred Siegel’s son – memorably told me, “The guy who is going to leave office and then give away a billion dollars is not going to be a traditional lame duck mayor.” The question, then, is one of courage. Welcome to your second term, Mr. Mayor. The clock is ticking.