That some cities get in trouble for any number of reasons isn't news and has been true throughout history, but to call America a Ponzi scheme is essentially meaningless. You might as well call civilization itself a Ponzi scheme that requires new members when they turn 18 to participate while old members at 65 cash out.
Outlining why civilization was a mistake is interesting, but not sure what good can come out of it: Sapiens: A Brief History of Humankind by Yuval Noah Harari
> but to call America a Ponzi scheme is essentially meaningless
Calling one specific economically advanced civilization a ponzi scheme because it has radically different and unsustainable development policy is far from meaningless given there are obvious models outside of the US that we could transition to.
> You might as well call civilization itself a Ponzi scheme that requires new members when they turn 18 to participate while old members at 65 cash out.
You might as well call all investments a ponzi scheme if our only requirement is that some people are buying in while others are exiting. The interesting aspect of an investment (or civilization/development policy) is how sustainable it is and how transparent it is about its sustainability.
> Outlining why civilization was a mistake is interesting, but not sure what good can come out of it
Strong Towns doesn't advocate that civilization was a mistake, and the good that can come of their work is not continuing to double down on unsustainable development practices.
As ex-urban planner in Europe and having lived in Houston, academic and professional knowledge of this wrong development in the US is widely known. He is just citing popular knowledge of the failed "American dream", suburban development for cars, not families.
Most of Europe has held a strong opposition to this development, and did fine.
Plenty of academic research/literature on this, as well as book:
> Chuck is not the first to point out the financial inefficiencies associated with sprawl. Robert Burchell of Rutgers[1] has led several important studies showing the substantially increased municipal costs associated with sprawl development; my then-colleague Matt Raimi devoted a well-researched chapter to it in our 1999 book Once There Were Greenfields.[2] At NRDC, we undertook a small empirical study[3] in Cleveland and Chicago that confirmed the additional operating and maintenance costs associated with suburban wastewater infrastructure when compared with that in the cities.
Strong Towns is only reporting what the literature is saying. You're free to be skeptical, but that's what they've concluded from the empirical evidence. The claim is falsifiable if you want to get into testing it.
It seems overbroad in that some cities are doing fine, while in other, less trendy places, there actually are dying towns that these arguments could very well apply to.
To quote Warren Buffet -- "Only when the tide goes out do you discover who's been swimming naked." That's one of the main points of Strong Towns; a focus on resiliency. Down turns in the economy, be it one oversized local sector (a local coal mine maybe) or all sectors (e.g. GFC), can be a trigger for a collapse; especially for a community that has focused all it's efficiency on that (those) sectors. If there's nothing left in the tank when the bad times come you only have one option left, collapse (and quite often a cascading collapse). Here's a term I just came up with; Sociological margin call.
That's a nice vivid metaphor for financial types. Although margin calls usually trigger liquidation, while Tainter's model of catabolic collapse starts more like an orderly wind-down. Or maybe a private vulture buyout. The real liquidation happens later.
Ponzi schemes run fine as long as the growth continues. The challenge is running at steady-state, or even weathering declines. That’s when you see if full-cycle costs reconcile.
The article says "most cities". The majority of municipalities in the US and elsewhere are those less trendy places. It’s a case of availability bias to think of NY or LA or Seattle or Austin as representative of "most cities". The "towns" in Strong Towns gives an idea of the size range of the municipalities they are talking about.
The Strong Towns thesis is that there are a lot of ways for things to "look" fine when things are not actually fine.
As an example, municipalities often count physical infrastructure like streets and water pipes as an asset on their books[1], even though it is illiquid and incurs large long-term liabilities.
Strongtowns is literal misinformation. The story about infrastructure costs killing municipalities is entirely false, and can be seen as such with only bare minimum of research. Infrastructure costs are typically around 10% of the budget of municipalities, and almost universally are under 20%. Look up your own city or town, and report back if you find otherwise.
Yes, when the political organization that would look bad if it bankrupted itself chooses how to do their accounting, they choose methods that make it look like they aren't bankrupt.
> It may be easiest to think in terms of personal finance. Imagine you purchase a car for $20,000 in 2015, but under a special promotion no payments are due on your bill until 2018. In what year did you incur the $20,000 bill? Most people would say 2015, the year you acquired the car. That’s the answer mandated under accrual accounting, a method of financial reporting required of all public companies by the Financial Accounting Standards Board. But many state and city legislatures disagree. They operate with the conviction that a bill is not incurred until the money leaves your bank account to pay it. So if you choose not to pay the bill for your car until 2018, for accounting purposes the bill will only appear that year.
> Current accounting practices do not bear any relation to the future cash flow or the actual financial health of the city. When cities take on obligations, they should be properly accounted for as liabilities, not assets. When the city uses debt to build new infrastructure, it is taking on the double liability of both the current debts payments and the future maintenance obligation. The tax base associated with these obligations needs to also be accounted for as a cash asset (think of it like an annuity) discounted over the useful life of the infrastructure. Then we would have an accurate account of the obligations (liabilities) of the community and how that compared to the tax base (assets) that needed to support them. In short, a true account.
There are plenty of suburban towns exhibiting exactly the same allegedly fiscally disastrous pattern of development, that are 50+ years old, and so the infrastructure debt should already catch up to them. Where are they?
Strongtowns tells very plausibly sounding stories, but is short of actual examples. Where are all the places getting bankrupt by infrastructure costs? Or is it always “half a century from now, the costs will totally catch up with you”?
1) We've more than doubled our population in the past 70 years which has allowed us to fund our current developments. This trend has slowed considerably and is likely to slow even more.
2) Massive federal government investment in specifically this type of development.
3) state bailouts of failing municipal infrastructure.
4) we are already seeing it happen in the form of chronic under-maintenance:
> In Wisconsin, farmers are struggling to safely use modern equipment on roads that were built over 50 years ago. In Arizona, a century-old bridge partially collapsed last summer after a train derailed. In Florida, old pipes are leaking millions of gallons of sewage.
> Civil engineers raise safety concerns as well, warning that many bridges are structurally deficient and that antiquated drinking water and wastewater systems pose risks to public health
> Although the lifetime of a sewer system (50 years) is longer than that of treatment equipment (15 to 20 years), renovation needs of a sewer system can be more costly. An EPA analysis estimated that if 600,000 miles of existing sewer systems were not renovated, the amount of deteriorated pipe would increase to 44% of the total network by 2020.
Also add:
- debt service related to infrastructure
- higher transportation related costs, eg for school buses, fire fighting, parking related building costs
But I agree Strongtown arguments tend to ignore other big cost categories.
> Infrastructure costs are typically around 10% of the budget of municipalities, and almost universally are under 20%. Look up your own city or town, and report back if you find otherwise.
Give the crater sized potholes I used to see when I lived there , I’d believe even less for cities in SCl.
The idea is that we just don't have enough productivity to sustain slightly longer roads, and live in the same houses we used to have on farms in 1920s is insulting to reader's intelligence.
“It found that while the net out-migration rate of this income group accelerated after the tax increase went into effect, so did the net out-migration rate of filers with incomes between $200,000 and $500,000, and by virtually the same amount.”
That’s their argument high taxes don’t drive people elsewhere?
Indeed, unlike say, California whose high taxes have helped create a robust electrical infrastructure which hasn’t randomly started fires destroying entire towns (and killing dozens) and doesn’t have rolling blackouts each summer.
Texas has other even more terrifying fragilities that I'm not going to get specific on, because they're that scary and I don't want to give crazy people ideas.
Texas property taxes are insanely high, I would would consider moving to be closer to family, but I am pretty averse to the annual taxes at the properties that would appeal to me there (10k - 20k annual taxes).
No it's not. I'm currently contemplating leaving my country of residence because absurd tax rates. I'm a productive member of society and high earner but I'm starting to loose faith in my institutions. If you keep on taxing, and fail your responsibilities, people get fed up and leave, that's what they do. Only the people that don't have the means to leave stay creating a particular nasty downward spiral of people without jobs and home ownership dependent on government subsidies.
> If you keep on taxing, and fail your responsibilities, people get fed up and leave,
Well sure. But that's probably true of "fail your responsibilities" regardless of tax rate. Nobody wants to live in a state without a well-functioning government.
N=1 isn't an argument either. I'm simply saying what a lot of people in my situation also thinks. It's just sensible that you don't stay because you like paying taxes. You stay where you are because of family and friends. To say that it doesn't influence people decision is deceiving.
Where is your country of residence? What is your effective tax rate? (Please don't tell me about your top marginal rate -- that is nonsense unless you have a enormous taxable income.) What do you think is the "correct" tax rate for your income level?
Sweden, the way I think we should look at it is the discrepancy between what my employer is paying me and what I receive in my bank account.
That's 51.8% of what I make. That is the government is taking just slightly more than half of everything I earn.
In order to answer what I think is reasonable to pay in tax, we need to look at what the Swedish government spends it's money on. Core infrastructure, health care, school, police etc. This is about 30% of the current government spending. That is frightening to me. I'd be happy to pay less in tax, frankly I want to pay as little as possible but Sweden has this huge government apparatus and it's growing by the day with all kinds of more or less non-essential government arms. I could go into details but I won't right now. I just don't want to finance a lot of this with my money.
It won't be possible any time soon but I'd love to see my tax rate cut in half and given the spending of our governments it should be possible but only if we make it a priority.
Are you a Swedish national or a high income foreigner? If #2, I strongly encourage you to stop complaining and leave soon. Sweden is a highly advanced democracy. This tax rate has been confirmed by numerous, fairly elected governments. The result of this policy is very low income equality and very strong social safety net.
I can assure you that an effective tax rate of 25% would result in much higher income inequality, and much weaker social safety net. Is this the society that you want?
It's sounds like you'd be interested to live in my country (born and raised here, I'm almost 40 now and have two kids, happily married etc) but I don't think you know all too much about Sweden. And if you really want to know, ask away, I will answer as truthfully as I can.
The tax rate hasn't always been this high. It's basically the result of government overreach over the past 100 years. I don't think you need to take more than 25% to provide essential services but I also expect people to pay more for the services that they use. I want people to allocate capital more so that the government.
Right now, Sweden has a serious immigration problem. 2 million new people over that past 20 years, a lot of them from radically different cultures. Our social welfare is being used to support these people and they aren't able to contribute back. This is a net drain on our economy and I'm not super happy about that. The studies we have show that these people don't integrate and don't generate tax revenue. And I'm not paying these taxes for their benefit, I'm paying these taxes to build a better future for my kids.
For the longest time, the lie that was being told was that it be a huge asset and opportunity for Sweden and it could have turned out this way, Sweden has had successful immigration in the past but it didn't turn out this way this time.
You talk about progressive taxation and income inequality but people forget that you need a healthy economy as well. You can't just tax everybody and expect equality.
Despite everything you think you may know about Sweden, we have the most gun violence and the most rape in Europe. The Swedish police can't be bothered with solving all the rape because of all the killings.
We have an energy crisis because environmentalists wants to shut down our nuclear reactors (50% of our energy production) and replace it with wind whit cannot work short term or during winter.
I will stop here. At some point Sweden did deserve it's reputation but this country is living on old merits. There's so much crap going on right now that I will take my chances. At least in a free and open society I'd be able to make a bigger impact myself.
Zero trolling: Did you ever consider relocation? Nothing radical: How about Norway, Denmark, or Finland? I've heard there is lots of language overlap with Norway and Denmark. And Finland has lots of respect for Swedish speakers given their special minority status (Hello Linus Torvalds!). Maybe the taxes might not be a /lot/ lower, but the social issues might be /different/. Another good point about those three nations: They are all close to home, if you need/want to visit relatives often (in a low carbon manner!).
If you want something radical, I would recommend:
(1) Australia -- very rich (they avoided the 2008 global financial crisis), much less fair than Sweden (but not stupidly so like US/HK/SG), and crazy high quality of life.
(2) New Zealand -- still rich, more fair than AUS, and insanely good nature / food.
Yes, we're spending the summer in Denmark. If we like what we see this is the best option. It all hinges on how this year's election goes. I don't know why I believe we can change but I hope we bring about something new and start fixing problems.
Taxes in the Scandinavian countries are similar but it wouldn't be as frustrating to pay them if everything else was working as intended.
My situation is foobar and I rather go to some place where you as an individual have more freedom and responsibilities. New Zealand sounds nice and warm though.
Texas is 32rd in terms of tax burden, you will prefer it.
>Personally, I can live without Fauxrari speeding past my door at 2 am.
That’s an enforcement problem. If you think this doesn’t happen in dense cities, with way more sports carts and way more bars, idk what to tell you.
I’ve literally moved to suburbia to escape the city noise. In my case it was fire engines passing by literally every 10 minutes. That’s normal in a dense “human-scale” city centre, but very rare in the suburbs.
Yes and California where I am just announced a 90 billion dollar tax surplus and I see road and bridges getting fixed all the time. Maybe the rest of the country is falling apart. I don't really know.
- All ponzis look good, until growth stops and the whole thing collapses.
- The towns are being bailed out by the state.
- The fact that you are seeing roads and bridges getting fixed does not mean that poorer cities are. And Strong Towns also shows that the suburbs (even if richer) get subsidized by the city centers.
> The idea is that we just don't have enough productivity to sustain slightly longer roads, and live in the same houses we used to have on farms in 1920s is insulting to reader's intelligence.
Plenty of academic research/literature on this, as well as books:
> Chuck is not the first to point out the financial inefficiencies associated with sprawl. Robert Burchell of Rutgers[1] has led several important studies showing the substantially increased municipal costs associated with sprawl development; my then-colleague Matt Raimi devoted a well-researched chapter to it in our 1999 book Once There Were Greenfields.[2] At NRDC, we undertook a small empirical study[3] in Cleveland and Chicago that confirmed the additional operating and maintenance costs associated with suburban wastewater infrastructure when compared with that in the cities.
Strong Towns is only reporting what the literature is saying. You're free to be skeptical, but that's what they've concluded from the empirical evidence. The claim is falsifiable if you want to get into testing it.
Measure the cost of services per acre/hectare of low-density and of high-density, then measure the revenues. You'll see which is net positive and which is net negative:
> Urban3 is a consulting company that helps cities better understand the economic impact of development. They have worked with many American cities to better understand and visualize the costs of development, and uncover which properties are productive, and which are not. Some municipalities have been willing to share that information, and it has provided a fascinating glimpse into the financial problems caused by sprawling car-centric suburban development.
>Measure the cost of services per acre/hectare of low-density and of high-density, then measure the revenues. You'll see which is net positive and which is net negative
I have no interest in living in shoeboxes.
> This is an accounting and ROI issue.
Nope. Some just think quality of life isn’t about accounting and ROI. Do enjoy your shoebox though.
If you aren’t willing to look at the data, and are admitting you’re closed off to even considering the idea (“I have no interest”), how do you know your head isn’t fully in the sand, or that you’re not part of the problem?
> Some just think quality of life isn’t about accounting and ROI
By disregarding the ROI, the implication is that other people need to live in the "shoeboxes" generating a surplus in order to fund your life choices.
If you want to avoid being a freeloader feel free to calculate the long-term cost of your suburban lifestyle and donate it to your municipality, or move to a rural area on well-water, septic, solar, and dirt roads.
High(er) density does not mean Manhattan and Hong Kong levels of density. 50-100 people per hectare (Hamburg, Paris, Stockholm, London, Brussels) is not crazy high:
Or if taxes need to be raised over and over to keep things in a state of good repair and other services suffer. A growing portion of your income could end up going to taxes with less left over to discretionary spending because the place you're living in made bad financial decisions.
Of course it's a typical growing infestation of mostly single-family-homes, but at least it has some urban core as opposed to the suburbs around it. And when Austin can't grow anymore those suburb-only municipalities will, and the prediction is that their finances will continue to worsen as upkeep costs start to dominate.
NYC public transportation has all the usual problems, but it moves a lot of people who otherwise would not be able to move. (this is basically why it's so "full of crazy people, but it's not a cause it's an effect of the efficiency of NYC)
I read the article, and still don't see what is being proposed.
> we need to intentionally return to our traditional pattern of development, one based on creating neighborhoods of value, scaled to actual people. When we do this, we will inevitably rediscover our traditional values of prudence and thrift as well as the value of community and place.
What does a walkable small town mean? I can walk to a pub, maybe some other food place, and a small market? The town I live in, like many around New England, has a cute little town center where the library and town hall are but there's not a lot else there. I'm certainly not living there without a car even if I were in the center.
I've spent some time doing walking tours in England and it doesn't seem much different.
Strongtowns isn’t totally anti car; it sounds like your small New England town is in the line of things they consider desirable.
My small Midwestern childhood suburb would have me drive at least 15 minutes to get to the nearest business, which was a big box supermarket with a parking lot that would take 10 minutes to walk across, plus crossing a highway sized median in order to get to the next business over. Meaning totally unwalkable, which is how most of the USA is - no town center with anything worth going to, meaning no community worth being a part of, and really high infrastructure costs for a very unproductive area.
> it sounds like your small New England town is in the line of things they consider desirable.
I don't know. It's mostly old farming towns around where I live. They don't generally have a lot of retail businesses--although the bigger ones may have some on the main street going through town. They're pleasant towns but you're mostly not walking to get places. To grocery shop I'm driving 15 minutes or to the nearest small city next door.
My town is the oldest one in the neighborhood (1600s) and my house is a couple hundred years old. But it was mostly farms so everything is pretty spread out.
The place you’re describing sounds like it’s less far-gone than much of the US. Lots of places on the East coast are like that because they predate cars by quite a lot, though many have also sprawled a lot later on.
A few things I would expect from a walkable small town:
- You’re able to easily walk to a grocery store
- Kids are able to easily and safely walk or bike to school
- Kids are able to easily and safely walk or bike to their friends’ houses
Most of the US, from what I’ve seen, doesn’t meet those standards.
In the semi-rural towns right around me, you mostly can't do those things. There are usually nice small town centers but not a lot of houses in the immediate center (which is also near the elementary school; the regional high school is the next town over). There's also very little in the way of businesses. And most of the town is pretty spread out along various country lanes. It's very pleasant but it isn't really walkable.
> So, less suburbs and more what?
Sprawling, automobile-centric development enforced by exclusionary zoning has been the prevailing land-use model in the US and Canada for so long (starting soon after the close of WWII) that few people alive today know anything different.
Streetcar suburbs (even with the streetcars now long gone) are a model of development that Strong Towns endorses.
