The Growth Ponzi Scheme

Charles Marohn, a member of the of the American Institute of Certified Planners and founder of the organization Strong Towns, has written a provocative series of articles called “The Growth Ponzi Scheme”

Marohn argues that cities gain short term revenue benefits from growth but the long term liability for maintaining the new infrastructure eventually overwhelms the revenue benefits.  Over a life cycle, a city frequently receives just a dime or two of revenue for each dollar of liability. Nationwide, the unfunded liability for infrastructure is estimated at $5 trillion.

Suburban sprawl requires the most new infrastructure and is the most expensive, but even urban growth comes with new infrastructure and service needs.  Growth is always expensive.  The short term revenue gain disguises the long term expenses that are being taken on.

It’s no coincidence that the most densely populated areas in our country are the most expensive to live in and have the highest local taxes, and that the oldest of our megalopolises are the one struggling with enormous debt problems and even bankruptcy.

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