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This is not guaranteed. Recall that in the 90’s Orange County - then a relatively affluent region - had to declare bankruptcy. Just because there are people wh

This is not guaranteed. Recall that in the 90’s Orange County - then a relatively affluent region - had to declare bankruptcy. Just because there are people who could foot the bill, does not mean that they will. If the surplus of wealth is in a community consumed by an inefficient urban structure then a financial crisis will arise just the same. In a lot of suburban areas the density is such that the infrastructure costs more and the property value is lower (on a per lot basis). The end result is that a lot of the wealthy suburbs will go broke. https://www.strongtowns.org/journal/2018/9/5/but-rich-people-live-here-so-we-cant-be-going-broke https://www.strongtowns.org/journal/2018/9/5/but-rich-people...

bilbo0s 6y ago
In a lot of suburban areas the density is such that the infrastructure costs more and the property value is lower (on a per lot basis). The end result is that a lot of the wealthy suburbs will go broke. If a suburb or ex-urb's liabilities exceed their assets, weren't they already broke? I'm trying to understand because I don't know a lot about this whole issue. But unless they charge people a whole lot in taxes to live in those areas, I'm not seeing how those places weren't poor in reality from the start? It seems to me those suburbs just managed to have other people pay for their infrastructure and services for so long that they never realized they were broke. But maybe there is some other source of money that they get from somewhere?
- hiram112 6y ago
  Most localities sell bonds, backed up by promise of future tax revenue. Eventually their bonds are downgraded and they have to pay higher and higher interest rates. Finally, the math comes crashing down and the game is over when the market has no more appetite for the bonds and the state and feds won't backstop them.
- blululu 6y ago
  In some sense yes, but the bill doesn’t come until much later. A city can run a deficit for a long time before its debt payments become its biggest budget item (or second after its police department in many cases). This leads to cuts, austerity and the usual contractions to a more manageable budget. And yes, in many cases the infrastructure for suburban development is initially paid for by someone else. Often some combination of federal and state programs to build roads and other public works projects along with subsidized loans.
throwaway0a5e 6y ago
If the county is bankrupt but the people in it are enjoying a high standard of living then I would call that "working" Government's job is to provide for its constituents as prescribed by said constituents, not to collect taxes, sit on cash or build things. Being bankrupt or not doesn't really matter any more than it affects the government's ability to carry out the will of the people and if the will of the people is to do nothing then bankruptcy probably won't be much of an impediment.

bilbo0s 6y ago

In a lot of suburban areas the density is such that the infrastructure costs more and the property value is lower (on a per lot basis). The end result is that a lot of the wealthy suburbs will go broke. If a suburb or ex-urb's liabilities exceed their assets, weren't they already broke? I'm trying to understand because I don't know a lot about this whole issue. But unless they charge people a whole lot in taxes to live in those areas, I'm not seeing how those places weren't poor in reality from the start? It seems to me those suburbs just managed to have other people pay for their infrastructure and services for so long that they never realized they were broke. But maybe there is some other source of money that they get from somewhere?

hiram112 6y ago
Most localities sell bonds, backed up by promise of future tax revenue. Eventually their bonds are downgraded and they have to pay higher and higher interest rates. Finally, the math comes crashing down and the game is over when the market has no more appetite for the bonds and the state and feds won't backstop them.
blululu 6y ago
In some sense yes, but the bill doesn’t come until much later. A city can run a deficit for a long time before its debt payments become its biggest budget item (or second after its police department in many cases). This leads to cuts, austerity and the usual contractions to a more manageable budget. And yes, in many cases the infrastructure for suburban development is initially paid for by someone else. Often some combination of federal and state programs to build roads and other public works projects along with subsidized loans.

throwaway0a5e 6y ago

If the county is bankrupt but the people in it are enjoying a high standard of living then I would call that "working" Government's job is to provide for its constituents as prescribed by said constituents, not to collect taxes, sit on cash or build things. Being bankrupt or not doesn't really matter any more than it affects the government's ability to carry out the will of the people and if the will of the people is to do nothing then bankruptcy probably won't be much of an impediment.