The Growth Ponzi Scheme

[Morris816]

The title of the thread is the same as the title of this Strong Towns post:

http://www.strongtowns.org/the-growth-ponzi-scheme/

It pretty much explains how the suburban model has been developed and why the suburbs are stuck in a vicious cycle of racking up debt to pay for infrastructure, then having to promote more growth to pay for that debt, which leads to the need for more infrastructure, which leads to more debt taken on to pay for it.

Thought it might be worth some discussion here. I may pull others over from time to time.

 

[Football_Bat]

Pretty dry stuff, but absolutely important and relevant. This is happening all over suburban Dallas. Particularly with schools, where nine-digit bond issues are common to keep up with growth. If the boom goes bust, a lot of school districts will be left hanging. Not to mention the cities.

 

[Pancamo]

Pretty dry stuff, but absolutely important and relevant. This is happening all over suburban Dallas. Particularly with schools, where nine-digit bond issues are common to keep up with growth. If the boom goes bust, a lot of school districts will be left hanging. Not to mention the cities.

Kind of like Detroit? If boom goes bust, most places are left hanging.

 

[Evil ... Thy name is Orville Redenbacher!!]

I think they have the problem Id'd, but I disagree with the cause.

Boom always goes bust.
Things grow until they don't. They either stay the same or regress. The Roman Empire grew and grew and grew ....

Detroit's problems, for example, were not the fault of city of Detroit.

 

[doctorquant]

People ... if they'd just quit trying to live their lives the way they want to, all these problems could be avoided.

 

[Morris816]

As far as alternatives to the suburban model go, the Strong Towns website founder has these suggestions:

http://www.strongtowns.org/placemaking-principles/

Example:

A Strong Town is designed with a physical layout that enhances the public realm and thus adds value to each property that fronts it. New growth and development must improve the public realm.

Always remember it's better to find ways to raise property values, because that raises your tax base, and thus raises more revenue, without having to raise the rates.

 

[YankeeFan]

Detroit's problems, for example, were not the fault of city of Detroit.

Really? They couldn't have done things any differently, which would have resulted in different results?

 

[Evil ... Thy name is Orville Redenbacher!!]

Detroit's problems, for example, were not the fault of city of Detroit.

Really? They couldn't have done things any differently, which would have resulted in different results?

What could they have done?
The American car industry there died . As a result the ancillary and supporting businesses were choked off. ... The jobs left, which means the tax base left. You can't run a water system or garbage service or municipal services with such a significant revenue loss, i.e. population decline.

Are there things the city could have done differently? Yes, but its akin to stacking deck chairs on the Titantic as opposed to folding them. The end result was the same: a catastrophic loss of jobs and tax base. Once the tax base is gone, it's game over.
The jobs aren't coming back. And neither is the city.

Underfunded pensions, bad deals with Wall Street and political corruption did NOT lead the toppling of Detroit.

The decline in population ruined the city. That was THE cause. Everything else was a contributing factor, but the end result would have remained the same.

 

[Pancamo]

"The decline in population ruined the city. That was THE cause. Everything else was a contributing factor, but the end result would have remained the same."

So when the boom ended, the bust began. Same for any other city, shopping center, office park or anything else built for a specific industry or economy.

 

[YankeeFan]

What could they have done?
The American car industry there died .

Any town/city that depends on one company or industry knows they are vulnerable.

The same thing is true for any company that relies on one product or one customer.

Detroit knew this all along. What steps did they take to diversify their industrial or corporate base?

And, the car industry is of course far from dead in America. What was it about Detroit, despite an experienced workforce, and infrastructure, that prevented it from competing with other cities/states for new manufacturing plants?

 

[3_Octave_Fart]

Decades of inept liberal leadership is what killed Detroit and other cities in the rust belt.

 

[Morris816]

Since Detroit was brought up, I'll share this with you:

http://www.strongtowns.org/journal/2013/7/15/detroit-an-american-autopsy.html

Now, before people get tuned up over what the writer says, I don't believe Mahorn is arguing that Detroit solely focusing on the auto industry wasn't a factor, but there was more to it than that... , that the way Detroit grew was the same way other cities and towns grew, on a model that couldn't be sustained.

If anything, Detroit focusing on one industry accelerated its path.

And here's a surprise for you... Detroit's bankruptcy might be a good thing.

http://www.theamericanconservative.com/urbs/as-detroit-prepares-for-clear-cutting-signs-of-hope/

Because of its bankruptcy, Detroit simply doesn't have the bureaucratic capacity to enforce its own accumulated tangle of once well-intentioned zoning codes, land-use regulations, and other assortments of red tape. And because the city has been so depressed, for so long, the institutional and financial barriers to entry are remarkably low. As Marohn mentions, "there aren't the large corporations that are competing and kind of raising up the initial cost of entry. So downtown–like the very core of Detroit–has some really fascinating things going on right now in terms of business startup and economics." Duany agrees: "Detroit is now the city where the risk-oblivious millennials can get things done."