Strong Towns

by Charles Mahron Jr.

Strong Towns talks about the infrastructure in the nuts and bolts. In other words, in profit and loss terms. Bringing a spotlight onto the cost of maintenance to our aging infrastructure compared to the profit that they generate, Strong Towns highlights a real issue within our society today. Infastructure is increasingly subsidizing the private sector through long term commitments. A reverse wealth transfer.

How this plays out in the long run is anyone’s guess. I think that rather than a retreat into proven infrastructure in lower income neighborhoods, the long term ramifications of municipal debt will be privitization and increased inflation.

Privitization makes sense with local governments freeing themselves of the maintenance burdens while also creating a one-time cash influx to pay down debts. However, this would likely be another massive wealth transfer where cash-heavy corporations purchase the infrastructure and start to charge residents directly. For example, water line maintenance costs ~$624/year in my community. For poorer neighborhoods, this trend would increasingly sap the power for economic mobility and have massive ramifications. For richer neighborhoods, this would mean higher cost to property ownership and larger developments, thereby pushing the maintenance cost to only a fraction of net costs.

Beyond privitatization, inflation will be a key measure used by local governments to service previous debt. Government debt unserviced is rather foreign of a concept for a nation as wealthy as America. As a result, inflation will reduce the net debt obligations and while in the long run, rates will be higher, if local governments can time privitization well with inflation, they stand a chance to drastically reduce their debt.


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