4 ms·

Found the text version more compelling myself: https://www.strongtowns.org/the-growth-ponzi-scheme https://www.strongtowns.org/the-growth-ponzi-scheme

koheripbal 4y ago
They make the argument that growth, in an of itself, is a "ponzi scheme". Whereas boom-bust economic cycles are nothing new, and are clearly not the same as a literal ponzi scheme. I don't think there's any novel thinking here. They're just rebranding cyclic economics for dramatic effect.
- adgjlsfhk1 4y ago
  The problem isn't growth the problem is that growth is required to pay for maintenance of the currently existing infrastructure. This is ponzi-scheme adjacent because if growth ever stops (and it has to), then everything collapses.
  - koheripbal 4y ago
    What you are describing is not a Ponzi scheme at all. It's just regular unsustainable growth.
NikolaNovak 4y ago
Thanks; the "Why", or the interesting part of "Why", seems only alluded to, rather than explicitly discussed. Is it that the low density of suburban development means that tax collected per area unit, is less than infrastructure maintenance per area unit? And is the even more implied solution to increase urban density at least to the point where revenue per area matches expenses per area?
- TuringNYC 4y ago
  Here are some reasons I think "why": - Long term liabilities are not tracked (e.g., muni worker pensions, pension guaranteed CoL adjustments) as hard liabilities. That makes it easy to budget things now and borrow invisibly from the future - Heads I Win, Tails You Lose mentality given that federal government or others could possibly bail you out. - Leadership worries about elections NOW and approval rating NOW, not about issues 20yrs into the future - Some muni worker groups have a stranglehold over towns and can demand far more than economically feasible, or else - Insufficient critical mass of citizenry to look at long term issues
- alistairSH 4y ago
  Basically, yes. The typical American suburb, even "dense" inner suburbs, often don't generate enough tax revenue to maintain infrastructure. The areas get built out with various subsidies from different levels of government; it's only 30 years down the road, when major infrastructure needs updated that the costs become apparent.
  - Ajedi32 4y ago
    Why then do towns (which have similar population density to suburbs) not suffer from the same problem?
    - alistairSH 4y ago
      I'm not convinced your assertion is true in general. Picking some local towns, cities, and counties... Shepherdstown WV, population of ~2000, population density 4,700/sq mi (bedroom community on outskirts of DC metro) Fairfax County, VA, population of 1.1 million, density 2,800/sq mi (big, mixed suburban county) Arlington County, VA, population 238,000, density 9,200/sq mi (much of it is very urban) Charlottesville, VA (city) population 46,000, density 4,500/sq mi (small college city) Anyways, the problem is sprawl, which can happen regardless of municipal label. Houston and LA sprawl and run into similar problems of upkeep as large counties like Fairfax Co VA.
- dionidium 4y ago
  It also means (and by "means" I mean "necessitates" or "requires") decay. Suburban development in metros that aren't otherwise growing guarantees decline elsewhere in the region. Sometimes people look at a place like North St. Louis in disbelief -- "how could all these houses have been abandoned?" -- without ever considering the fundamentals. The region has expanded to cover hundreds of square miles of new development since 1970 all with like 1% population growth. They doubled the number of houses, but they didn't double the number of households. Decline is an illustration of the pigeonhole principle. So it's not just that the new suburbs are too low-density to support themselves; they also create the conditions whereby the old parts of the city also de-densify to unsustainable levels.
boole1854 4y ago
It seems to me that the article would benefit from more data supporting the author's arguments. It's not clear what percentage of cities are affected by the problem or the average scale of the problem in those cities.
treis 4y ago
This pops up every couple of months or so. The numbers don't make sense and don't reflect reality. Infrastructure is ~10% of local government budget. Nobody is going bankrupt over that. And AFAIK there's no city in existence where taxes & government expenditures are lower in the city compared to the suburbs. The expensive parts about government are mostly Schools & Criminal Justice. Both are significantly more expensive in cities on a per capita basis.

koheripbal 4y ago

They make the argument that growth, in an of itself, is a "ponzi scheme". Whereas boom-bust economic cycles are nothing new, and are clearly not the same as a literal ponzi scheme. I don't think there's any novel thinking here. They're just rebranding cyclic economics for dramatic effect.

adgjlsfhk1 4y ago
The problem isn't growth the problem is that growth is required to pay for maintenance of the currently existing infrastructure. This is ponzi-scheme adjacent because if growth ever stops (and it has to), then everything collapses.
- koheripbal 4y ago
  What you are describing is not a Ponzi scheme at all. It's just regular unsustainable growth.

NikolaNovak 4y ago

Thanks; the "Why", or the interesting part of "Why", seems only alluded to, rather than explicitly discussed. Is it that the low density of suburban development means that tax collected per area unit, is less than infrastructure maintenance per area unit? And is the even more implied solution to increase urban density at least to the point where revenue per area matches expenses per area?

TuringNYC 4y ago
Here are some reasons I think "why": - Long term liabilities are not tracked (e.g., muni worker pensions, pension guaranteed CoL adjustments) as hard liabilities. That makes it easy to budget things now and borrow invisibly from the future - Heads I Win, Tails You Lose mentality given that federal government or others could possibly bail you out. - Leadership worries about elections NOW and approval rating NOW, not about issues 20yrs into the future - Some muni worker groups have a stranglehold over towns and can demand far more than economically feasible, or else - Insufficient critical mass of citizenry to look at long term issues
alistairSH 4y ago
Basically, yes. The typical American suburb, even "dense" inner suburbs, often don't generate enough tax revenue to maintain infrastructure. The areas get built out with various subsidies from different levels of government; it's only 30 years down the road, when major infrastructure needs updated that the costs become apparent.
- Ajedi32 4y ago
  Why then do towns (which have similar population density to suburbs) not suffer from the same problem?
  - alistairSH 4y ago
    I'm not convinced your assertion is true in general. Picking some local towns, cities, and counties... Shepherdstown WV, population of ~2000, population density 4,700/sq mi (bedroom community on outskirts of DC metro) Fairfax County, VA, population of 1.1 million, density 2,800/sq mi (big, mixed suburban county) Arlington County, VA, population 238,000, density 9,200/sq mi (much of it is very urban) Charlottesville, VA (city) population 46,000, density 4,500/sq mi (small college city) Anyways, the problem is sprawl, which can happen regardless of municipal label. Houston and LA sprawl and run into similar problems of upkeep as large counties like Fairfax Co VA.
dionidium 4y ago
It also means (and by "means" I mean "necessitates" or "requires") decay. Suburban development in metros that aren't otherwise growing guarantees decline elsewhere in the region. Sometimes people look at a place like North St. Louis in disbelief -- "how could all these houses have been abandoned?" -- without ever considering the fundamentals. The region has expanded to cover hundreds of square miles of new development since 1970 all with like 1% population growth. They doubled the number of houses, but they didn't double the number of households. Decline is an illustration of the pigeonhole principle. So it's not just that the new suburbs are too low-density to support themselves; they also create the conditions whereby the old parts of the city also de-densify to unsustainable levels.

boole1854 4y ago

It seems to me that the article would benefit from more data supporting the author's arguments. It's not clear what percentage of cities are affected by the problem or the average scale of the problem in those cities.

treis 4y ago

This pops up every couple of months or so. The numbers don't make sense and don't reflect reality. Infrastructure is ~10% of local government budget. Nobody is going bankrupt over that. And AFAIK there's no city in existence where taxes & government expenditures are lower in the city compared to the suburbs. The expensive parts about government are mostly Schools & Criminal Justice. Both are significantly more expensive in cities on a per capita basis.