America's Growth Ponzi Scheme(strongtowns.org)
strongtowns.org
America's Growth Ponzi Scheme
https://www.strongtowns.org/journal/2020/5/14/americas-growth-ponzi-scheme-md2020
216 comments
> They seem to be very bad at their jobs.
On the contrary, I'd argue they are mostly good at their jobs.
Their job isn't to help the average American. Their job is to serve Capital. They get paid by the rich, not by average Americans.
They are doing a good job at that. Look at the stock market, it goes up while Main Street is in turmoil.
On the contrary, I'd argue they are mostly good at their jobs.
Their job isn't to help the average American. Their job is to serve Capital. They get paid by the rich, not by average Americans.
They are doing a good job at that. Look at the stock market, it goes up while Main Street is in turmoil.
This screencap just about sums it up: https://pbs.twimg.com/media/EVMnSzMUYAMW4n8?format=jpg
It's not often you see an image and immediately think "yep, that'll be in some history book in short order". Just utterly divorced and a sign of a _very_ healthy society...
If you can't see it: An image with "Dow's Best Week Since 1938" on a graphic while breaking news declares "More than 16 M Americans have lost jobs in 3 weeks"
It's not often you see an image and immediately think "yep, that'll be in some history book in short order". Just utterly divorced and a sign of a _very_ healthy society...
If you can't see it: An image with "Dow's Best Week Since 1938" on a graphic while breaking news declares "More than 16 M Americans have lost jobs in 3 weeks"
Yeah, that'll definitely end up as an iconic image.
For those that want a higher quality screenshot, I just took one: https://i.imgur.com/FzkO6W5.png
It's Jim Cramer's Mad Money on April 9th 2:00 in. (I do not recommend watching Cramer.)
For those that want a higher quality screenshot, I just took one: https://i.imgur.com/FzkO6W5.png
It's Jim Cramer's Mad Money on April 9th 2:00 in. (I do not recommend watching Cramer.)
Oh nice thanks! this one is much better.
Te irony is that in a better world this would be great news. 1'Due to great technical innovations, we were able to free up 16M FTE previously required to maintain our economy. We are continuing to redistribute what still needs to be done and expect starting next quarter the average required workweek can be shortened to 24 hours per person, leaving all much more time to leasure and pursue personal interests. The outlook for hitting the 20 hours/week milestone has been udated and is now expected to be reach in 14 months from now'.
Instead neo-liberalism serves us this distopian neo-feudal regime that requires all to 'work more/work longer' just to slow our decline into near poverty while a select few 'rulers' horde all the fruits of progress.
Instead neo-liberalism serves us this distopian neo-feudal regime that requires all to 'work more/work longer' just to slow our decline into near poverty while a select few 'rulers' horde all the fruits of progress.
It makes me so sad and angry that none of that is the case. A better world _is_ possible.
I've been struggling with working life, especially in the midst of wfh during this pandemic and the common question I keep arriving at is: "what's the point in all this?" I don't claim to have it hard (I am so fortunate to have a steady job that allows me to work from home) but there's just a level of mental exhaustion and constant low level burnout that everyone is experiencing (especially amongst my cohorts/generation/friend group since that's my sample size) and it's just like... okay we have another what 40+ years of this? all for what?
and that doesn't even apply to the people working those app jobs and doing physical labor, who no doubt have it worse than anyone else I know.
I've been struggling with working life, especially in the midst of wfh during this pandemic and the common question I keep arriving at is: "what's the point in all this?" I don't claim to have it hard (I am so fortunate to have a steady job that allows me to work from home) but there's just a level of mental exhaustion and constant low level burnout that everyone is experiencing (especially amongst my cohorts/generation/friend group since that's my sample size) and it's just like... okay we have another what 40+ years of this? all for what?
and that doesn't even apply to the people working those app jobs and doing physical labor, who no doubt have it worse than anyone else I know.
>>>there's just a level of mental exhaustion and constant low level burnout
This, x1000. It's maddening. I work in a an understaffed military HQ that tries to do too many things, while suffering through 30-50% personnel turnover every summer. We plan exercises talking about "readiness" but it's like groundhog day...EVERY.DAMN.TIME. Nothing really changes, the organization is no better prepared to fight today than it was 3 years ago, and all it's doing is burning out the mid-career professionals we'll need to carry the force when the war eventually kicks off for real.
Across industries, across geographies...we are living in an oppressive cyberpunk dystopia.
This, x1000. It's maddening. I work in a an understaffed military HQ that tries to do too many things, while suffering through 30-50% personnel turnover every summer. We plan exercises talking about "readiness" but it's like groundhog day...EVERY.DAMN.TIME. Nothing really changes, the organization is no better prepared to fight today than it was 3 years ago, and all it's doing is burning out the mid-career professionals we'll need to carry the force when the war eventually kicks off for real.
Across industries, across geographies...we are living in an oppressive cyberpunk dystopia.
The Dow is made up of 30 companies and is in no way reflective of the full economy. I don't see how that sums anything up at all.
I mean that's the point, no? The dow having a record day while tens millions are suddenly no longer employed demonstrates a disconnect between the two. Tens of millions out of work should spell disaster for companies, should it not?
First of all, you are ignoring the fact that the Dow dropped ~37% earlier in the year in response to what was happening. The market has never dropped that much so fast.
Second, a great day means nothing if you look at how volatile the market has been lately. We are seeing large swings up and down on a regular basis.
Third, there is no indication that tens of millions unemployed (which we are still figuring out how much of that is actually temporary vs. permanent) would necessarily immediately affect the large cap stocks in the Dow. These are companies like 3M, Apple, Caterpillar, etc...
Lastly, just because the Dow is up significantly on a single day does not mean all the stocks in the Dow are doing great. We've been seeing handfuls of stocks carry indices upwards even though they also contain poor performers.
Second, a great day means nothing if you look at how volatile the market has been lately. We are seeing large swings up and down on a regular basis.
Third, there is no indication that tens of millions unemployed (which we are still figuring out how much of that is actually temporary vs. permanent) would necessarily immediately affect the large cap stocks in the Dow. These are companies like 3M, Apple, Caterpillar, etc...
Lastly, just because the Dow is up significantly on a single day does not mean all the stocks in the Dow are doing great. We've been seeing handfuls of stocks carry indices upwards even though they also contain poor performers.
You can "well akshually" me all you want, it still doesn't discount what I said. It's the juxtaposition of people celebrating the "best day since [x]" while tens of millions are losing jobs.
I'm just trying to say that a CNBC headline does not equal "people celebrating". If you watch it for a few days you'll see what I mean. Lately it feels like it has been "Best day since the great depression" followed by "Worst day since the great depression" every other day. They are very sensationalist.
Not capital. The incumbent power brokers. Capital would like to work, build new housing, hire workers from abroad, sell drugs legally, build nuclear power plants ... and pollute, and take on more risk, and hire people below minimal wage, and try out this new amazing medication, and so on.
There are good sides and bad sides to this. Currently US politics is in a deadlock between fractured local interests (NIMBY/gentrification, preservation, but also we need low-income housing too; let's build a wall, but also allow cheap farm labor) and federal concerns (tariffs, fuck Obamacare, and everyone in general, but also let's help the economy, etc).
This kind of polarized chaos only helps those who are entrenched and are already playing dirty.
There are good sides and bad sides to this. Currently US politics is in a deadlock between fractured local interests (NIMBY/gentrification, preservation, but also we need low-income housing too; let's build a wall, but also allow cheap farm labor) and federal concerns (tariffs, fuck Obamacare, and everyone in general, but also let's help the economy, etc).
This kind of polarized chaos only helps those who are entrenched and are already playing dirty.
I think the incumbent power brokers are those with capital, but maybe I'm wrong. I think that there's capitalists on both sides of almost every issue you described, and that's how we ended up with the balance we have.
If not, who are these incumbent power brokers? And how does it benefit them to ban drugs, not build new housing, limit immigration, etc?
If not, who are these incumbent power brokers? And how does it benefit them to ban drugs, not build new housing, limit immigration, etc?
Who decides that the IRS shouldn't have a free filing system and Intuit/TurboTax should be able to rent-seek on the country? Who decides that megachurches are a-okay and tax exempt? Who decides that hairdressers need a license?
Sure, money is always involved, "political capital" is real, but accumulating more of it doesn't increase the capacity of global political system (as economic capital grows the economic capacity), it just consolidates and polarizes it. So fucks it up basically. And in that regard it's more like a market failure of politics. Too little political competition, too much outside influences and forcing factors. (Eg too much ideology. Or a kind of cross-financing props up one side - basically somewhere in the decision making hierarchy that small sector was conceded, sacrificed, so Intuit continues to make big profits, but something else happened instead, let's say some state got some subsidy.)
All in all, first-past-the-post voting entrenches the big power brokers. (Who might not be the elected officials, but quite usually of course are.) Then the emergent two-party system leads to polarization of other issues. Local issues also became party issues. This brings some uniformity and consistency, but obviously does cause a lot of inefficiencies too.
So, how does it benefit them to do X? Probably it makes them good party members. And that consistency makes the party viable long term. Thus even local changes can only happen if the whole country zeitgeist changes.
Sure, money is always involved, "political capital" is real, but accumulating more of it doesn't increase the capacity of global political system (as economic capital grows the economic capacity), it just consolidates and polarizes it. So fucks it up basically. And in that regard it's more like a market failure of politics. Too little political competition, too much outside influences and forcing factors. (Eg too much ideology. Or a kind of cross-financing props up one side - basically somewhere in the decision making hierarchy that small sector was conceded, sacrificed, so Intuit continues to make big profits, but something else happened instead, let's say some state got some subsidy.)
All in all, first-past-the-post voting entrenches the big power brokers. (Who might not be the elected officials, but quite usually of course are.) Then the emergent two-party system leads to polarization of other issues. Local issues also became party issues. This brings some uniformity and consistency, but obviously does cause a lot of inefficiencies too.
So, how does it benefit them to do X? Probably it makes them good party members. And that consistency makes the party viable long term. Thus even local changes can only happen if the whole country zeitgeist changes.
Wall Street does not reflect the current economy. It reflects the major corporations future prospects. In the current economic situation, Main Street has been forced to close and does not have the cash to stay afloat, which is very good for large companies who will have less competition and easy acquisitions
So your cynical view is that the government exists to serve the term rich/capitalism. Thats fine for you to think. But some of us would like to have a functional democratic republic.
It's not cynical, it's historical:
"All communities divide themselves into the few and the many. The first are the rich and well born, the other the mass of the people. The voice of the people has been said to be the voice of God; and however generally this maxim has been quoted and believed, it is not true in fact. The people are turbulent and changing; they seldom judge or determine right. Give therefore to the first class a distinct, permanent share in the government. They will check the unsteadiness of the second, and as they cannot receive any advantage by a change, they therefore will ever maintain good government. Can a democratic assembly, who annually revolve in the mass of the people, be supposed steadily to pursue the public good?"
-Alexander Hamilton, Farrand's Records of the Federal Convention, v. 1, p. 299. (June 19, 1787)
"All communities divide themselves into the few and the many. The first are the rich and well born, the other the mass of the people. The voice of the people has been said to be the voice of God; and however generally this maxim has been quoted and believed, it is not true in fact. The people are turbulent and changing; they seldom judge or determine right. Give therefore to the first class a distinct, permanent share in the government. They will check the unsteadiness of the second, and as they cannot receive any advantage by a change, they therefore will ever maintain good government. Can a democratic assembly, who annually revolve in the mass of the people, be supposed steadily to pursue the public good?"
-Alexander Hamilton, Farrand's Records of the Federal Convention, v. 1, p. 299. (June 19, 1787)
I just think that people work for who pays them. Very little of D.C. politician's money comes from everyday Americans.
I'd argue a true democratic republic isn't possible alongside capitalism. The rich will always have disproportionate power over elected officials. Whether it's through direct payments, or the ability to influence voters by manufacturing consent (https://en.wikipedia.org/wiki/Manufacturing_Consent).
I'd argue a true democratic republic isn't possible alongside capitalism. The rich will always have disproportionate power over elected officials. Whether it's through direct payments, or the ability to influence voters by manufacturing consent (https://en.wikipedia.org/wiki/Manufacturing_Consent).
> This is absurd. There is plenty of money, we could tax something like...
We could spend less money.
In Education we spend far more than the 80's and have less to show for it.
In healthcare we have astronomical costs that have not bought us more vitality, but an extended morbidity. Gone are the days of grandmothers with sinewy arms maintaining huge gardens. Obesity in the early 2000's was at "crisis" levels and it's gotten so much worse that we just stopped talking about it. But we can keep the numbers up a bit here and there.
In infrastructure we let car-first build-out destroy everything Jane Jacobs said we were going to lose. Valuable things that cost no money at all, but are too intangible for top-down planning to notice.
The failure of imagination isn't finding new people to juice. It's finding ways to be effective. I agree they are very bad at their jobs, but I don't think finding a new way to tax the rich is any more creative or sustainable. I think it's the same failure of imagination that you fear.
We could spend less money.
In Education we spend far more than the 80's and have less to show for it.
In healthcare we have astronomical costs that have not bought us more vitality, but an extended morbidity. Gone are the days of grandmothers with sinewy arms maintaining huge gardens. Obesity in the early 2000's was at "crisis" levels and it's gotten so much worse that we just stopped talking about it. But we can keep the numbers up a bit here and there.
In infrastructure we let car-first build-out destroy everything Jane Jacobs said we were going to lose. Valuable things that cost no money at all, but are too intangible for top-down planning to notice.
The failure of imagination isn't finding new people to juice. It's finding ways to be effective. I agree they are very bad at their jobs, but I don't think finding a new way to tax the rich is any more creative or sustainable. I think it's the same failure of imagination that you fear.
You are right.
We could spend less money on healthcare by adopting Medicare4All or similar.
We could cut the military budget _dramatically_ without impacting our national security.
And yet both parties have done little but increase the extent to which our countries is beholden to banks.
We could spend less money on healthcare by adopting Medicare4All or similar.
We could cut the military budget _dramatically_ without impacting our national security.
And yet both parties have done little but increase the extent to which our countries is beholden to banks.
I disagree, I don't think payer-side things are why healthcare is expensive, but payee-side things (hospitals, pharmacy benefit managers, docs, and the choices that flow from them) + obesity/T2D. I think this is pretty clear from where the money goes and why people in the US need so much healthcare in the first place, and that hamming about insurance is 95% a canard.
If you think you can replicate the healthcare success of [pick your model country] without also replicating their obesity rates, doctors salaries, amount of testing and prescriptions, etc, you will find that who pays for it all is the least of your concerns. As Americans consider it, we probably have too much "healthcare", not too little.
Others have spent far more time than me on this if you're interested: https://randomcriticalanalysis.com/2020/01/31/i-created-a-pr...
If you think you can replicate the healthcare success of [pick your model country] without also replicating their obesity rates, doctors salaries, amount of testing and prescriptions, etc, you will find that who pays for it all is the least of your concerns. As Americans consider it, we probably have too much "healthcare", not too little.
Others have spent far more time than me on this if you're interested: https://randomcriticalanalysis.com/2020/01/31/i-created-a-pr...
The US is pretty close to a lot of the rest of the OECD in obesity rates (in particular, UK/Australia/NZ) https://data.oecd.org/healthrisk/overweight-or-obese-populat...) while costing twice what other systems pay for healthcare.
The stuff about pharmacy benefits and doctor salaries are artifacts of our weird way of paying for things. I'm not sure why you're portraying them as separate, isolated issues.
The stuff about pharmacy benefits and doctor salaries are artifacts of our weird way of paying for things. I'm not sure why you're portraying them as separate, isolated issues.
Or we could fix medicare and medicaid and make them actually efficient. No need for medicare for all.
We just need to fix billing, end price fixing, and massively deregulate - certificates of need, bans on telemedicine, pay for procedure etc. This will actually fix it. Medicare and Medicaid are incredibly expensive and inefficient.
We just need to fix billing, end price fixing, and massively deregulate - certificates of need, bans on telemedicine, pay for procedure etc. This will actually fix it. Medicare and Medicaid are incredibly expensive and inefficient.
> Medicare and Medicaid are incredibly expensive and inefficient.
This appears to be, at the very least, debatable:
https://www.healthaffairs.org/do/10.1377/hblog20110920.01339...
This appears to be, at the very least, debatable:
https://www.healthaffairs.org/do/10.1377/hblog20110920.01339...
>In healthcare we have astronomical costs that have not bought us more vitality, but an extended morbidity. Gone are the days of grandmothers with sinewy arms maintaining huge gardens. Obesity in the early 2000's was at "crisis" levels and it's gotten so much worse that we just stopped talking about it. But we can keep the numbers up a bit here and there.
Even funnier is we can blame our covid 19 failures on being unhealthy: https://www.cnn.com/2020/05/17/politics/us-health-conditions...
Obviously this a bit of shift the blame (played by both parties), but we can see that reaching for this argument means we really have failed on the healthcare and preventative medicine side - covid19 just calls this out.
Even funnier is we can blame our covid 19 failures on being unhealthy: https://www.cnn.com/2020/05/17/politics/us-health-conditions...
Obviously this a bit of shift the blame (played by both parties), but we can see that reaching for this argument means we really have failed on the healthcare and preventative medicine side - covid19 just calls this out.
> we could tax something like 5% of stock buybacks and completely rebuild our entire society from the ground up.
Let's see a source or even back-of-the napkin calculation on this
Let's see a source or even back-of-the napkin calculation on this
Planet money podcast said we did about $7 trillion in stock buy backs over the last 10 years [0]. That is $700 billion a year, so a 5% tax is $35 billion a year.
It’s a lot of money, but not enough for fundamental change. It would of been enough collectively to pay for the stimulus we are doing now though.
0 - https://www.marketwatch.com/story/sp-500-companies-spent-7-t...
It’s a lot of money, but not enough for fundamental change. It would of been enough collectively to pay for the stimulus we are doing now though.
0 - https://www.marketwatch.com/story/sp-500-companies-spent-7-t...
Didn't the Fed recently create a couple trillion dollars to inject into the economy?
I'm not sure why you'd need additional taxes at all, when it seems that deflationary pressure is so great that you can summon up trillions with little inflationary consequence. $35 billion/year seems like nothing compared to this.
I'm not sure why you'd need additional taxes at all, when it seems that deflationary pressure is so great that you can summon up trillions with little inflationary consequence. $35 billion/year seems like nothing compared to this.
If you are referring to the Fed repo market operations, then these are short-term collateralised loans, so not really the same thing as pumping trillions in to the real economy.
A fiscal stimulus of that size would almost certainly drive demand (during a pandemic that has caused a negative supply shock) and therefore increase inflation.
A fiscal stimulus of that size would almost certainly drive demand (during a pandemic that has caused a negative supply shock) and therefore increase inflation.
At a minimum doesn't the CARES act transfer at least $500 billion to SMBs and unemployed people, via PPP and Federal supplemental UI? And since this is all deficit spending, it's implicitly backed up by the Fed being willing to purchase Treasury issuances? My point being that if you buy into MMT and you don't think what has happened in the last couple months has created any inflationary pressure then you probably believe you can spend another trillion with little risk.
Those were loans, paid back almost immediately.
Does not compute. If congress passed a stock buyback tax 10 years ago, there would have been less buybacks over the 10 years.
Not just less, there would be none and it would have all been given out as dividends. Stock buybacks are just dividends reinvested in the company for you.
Dividends would have been taxed. “Stock buy-backs are just...” leaves a lot out, enough that one might wonder if it were intentional.
The company buying back their stock had to buy it from someone though and that person who sold it is going to pay a tax on any gains from that sale.
I bought way too high, so when I sell my AcmeCo stock back to AcmeCo, I’ll get a tax refund!
If you want to tax profits, then tax profits. If you want to have cheesy loophole tax avoidance, stock buy-backs might be more your style.
If you want to tax profits, then tax profits. If you want to have cheesy loophole tax avoidance, stock buy-backs might be more your style.
Then how about the company doesn't make that investment decision for me?
You can sell a proportion of you holdings to maintain the same ownership percentage thus acting like a dividend if you want. With fractional shares, you should be able to even do it with a small amount of shares. Albeit, I don't know of any brokerage that automates it for you. You can also just buy ETFs as they will sell stocks themselves in order to maintain proper weightings.
Then sell proportionately to the buyback, you'll probably even make some money to get taxed on
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Really? You think it will pay for the 2+ trillion existing stimulus? That is not to mention the stimulus that just got passed in the house, another 3 trillion. It probably wont actually be enacted to law but 35 billion is peanuts when you are talking about these numbers.
My understanding is that we are spending over 2 trillion in stimulus, it doesn't seem like 35 billion or even 700 billion will come close to paying for that.
Except if you taxed those buybacks, they wouldn't be happening, or would only be happening at a much smaller volume. BBs are a way for companies to return money to investors when they don't know what else to do with their cash. This is how capitalism is supposed to work by optimising the allocation of capital.
What you want to do is create an artificial incentive for not returning the capital, which will lead to its suboptimal allocation. Companies will either sit on their cash, or they will be putting it into projects they would otherwise not be doing.
What you want to do is create an artificial incentive for not returning the capital, which will lead to its suboptimal allocation. Companies will either sit on their cash, or they will be putting it into projects they would otherwise not be doing.
BBs are a way for companies to return money to investors when they don't know what else to do with their cash.
That’s called a “dividend”. A dividend is taxed, however. I’ll leave the rest as an exercise for the reader.
What you want to do is create an artificial incentive for not returning the capital, which will lead to its suboptimal allocation.
I truly don’t know what to make of this comment. On the one hand, we are all being mansplained on how stock buy-backs works, yet not one mention of the word “dividend”.
That’s called a “dividend”. A dividend is taxed, however. I’ll leave the rest as an exercise for the reader.
What you want to do is create an artificial incentive for not returning the capital, which will lead to its suboptimal allocation.
I truly don’t know what to make of this comment. On the one hand, we are all being mansplained on how stock buy-backs works, yet not one mention of the word “dividend”.
> A dividend is taxed, however.
You know what else is taxed? When a company buys back stock, reducing the number of shares outstanding so that each share represents more of the ongoing business, thus sending its stock price higher. The tax on this is called a "capital gains tax," perhaps you've heard of it?
You know what else is taxed? When a company buys back stock, reducing the number of shares outstanding so that each share represents more of the ongoing business, thus sending its stock price higher. The tax on this is called a "capital gains tax," perhaps you've heard of it?
Stock buy backs are the largest point of growth for company spending since 2010. American companies spend more on that than R&D. Since it is the only growth they want to do, and can't weather a couple weeks of downturn because they spent all their money on stock buy backs, it needs a mechanism to curb that bad behavior and make them able to survive without the government printing trillions to bail them out.
Keeping interest rates artificially low is a good way of making sure no one - companies included - keeps any cash at hand.
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I never really understood universal basic income until this crisis. Many people really need this basic income now. So you could print money and give it to them, but ideally I guess you need to replace that money from the tax base. But it would be kind of silly (and inefficient) to give out a basic income to everybody and then ask for it back from the poor people who need it. So the only way it works is if you tax the rich people and then give everyone a basic income -- however the basic income that rich people get would necessarily have to be less than the money they paid in taxes to pay for it. So... essentially you are taking money from rich people and handing it to poor people.
I mean, I can understand why rich people would be against this idea. The whole thing about being rich is that you can take a few dollars from everybody and get rich. But the reverse could be quite painful. Take a whole whack of dollars and give a few dollars to everybody. It appears to break the "get rich" thing... Until you realise that poor people will spend that money (i.e. give it back to the rich people). Ford hired private investigators to make sure the people he was paying minimum wage to were going to spend it. Ford was a smart guy (Nice guy?? No idea, but definitely smart).
I really think that if you want fly the idea of rich people funding the improvement of society, you need to link it back to them getting richer. Otherwise, without a revolution, I don't think you're going to get anywhere. They can spend quite a few dollars lobbying government before they get anywhere close to spending what they would need to spend to improve society.
I mean, I can understand why rich people would be against this idea. The whole thing about being rich is that you can take a few dollars from everybody and get rich. But the reverse could be quite painful. Take a whole whack of dollars and give a few dollars to everybody. It appears to break the "get rich" thing... Until you realise that poor people will spend that money (i.e. give it back to the rich people). Ford hired private investigators to make sure the people he was paying minimum wage to were going to spend it. Ford was a smart guy (Nice guy?? No idea, but definitely smart).
I really think that if you want fly the idea of rich people funding the improvement of society, you need to link it back to them getting richer. Otherwise, without a revolution, I don't think you're going to get anywhere. They can spend quite a few dollars lobbying government before they get anywhere close to spending what they would need to spend to improve society.
There's an interesting article (i forget the title, would love if someone could link it) where the author makes the claim that the true modern wealth gap is between the super rich and the upper middle class.
What the article says is that upper middle class feel that their potential income earned is stagnating RELATIVE to the super rich whose income is still increasing.
The middle and poor classes are already beaten into a silence that their standard of living will always remain stagnant and they will not enjoy the advances in the economy (since around 40 years ago).
It corroborates your point about why rich (in my definition, upper middle class) people would be against the idea of UBI. A lawyer making around 200-300k/yr has had his wages increasing around 5 times slower than a CEO / ibanker making around $2m a year. Instead of thinking, "hey I have a ton of money that poorer people could really use right now", they are instead thinking, "hey, how come THOSE rich people are growing their money soo much faster and I still have to slave away for 20 years before I can pay off my house?"
The term "rich" isn't good enough as a classification nowadays because there's a huge difference between the top 400 individuals in the US, the top 1%, and the top 25%, and they're all considered rich by the old definition.
What the article says is that upper middle class feel that their potential income earned is stagnating RELATIVE to the super rich whose income is still increasing.
The middle and poor classes are already beaten into a silence that their standard of living will always remain stagnant and they will not enjoy the advances in the economy (since around 40 years ago).
It corroborates your point about why rich (in my definition, upper middle class) people would be against the idea of UBI. A lawyer making around 200-300k/yr has had his wages increasing around 5 times slower than a CEO / ibanker making around $2m a year. Instead of thinking, "hey I have a ton of money that poorer people could really use right now", they are instead thinking, "hey, how come THOSE rich people are growing their money soo much faster and I still have to slave away for 20 years before I can pay off my house?"
The term "rich" isn't good enough as a classification nowadays because there's a huge difference between the top 400 individuals in the US, the top 1%, and the top 25%, and they're all considered rich by the old definition.
The top 90% already pays the bulk majority of taxes. If you push them to hard you get what happened in France, a stagnant economy with no innovation as it all fled to countries with a more competitive tax rate
I assume you meant the top 10%. They pay the majority of taxes because they earn the majority of the income and have something like 80% of the nation's wealth. There's little left to take from the bottom 90%.
>They seem to be very bad at their jobs.
I'll submit the opposite: they are very good at their jobs, it's just you just aren't who they work for. Lots of wealthy people are doing juuuussst fine.
I'll submit the opposite: they are very good at their jobs, it's just you just aren't who they work for. Lots of wealthy people are doing juuuussst fine.
The one I've been daydreaming about is to force publicly-traded companies that operate in the United States, whenever they issue stock, they have to issue 20% of it to the US Government.
They don't pay taxes. So, fine, issue stock to the government. The government can hold or sell the stock when it makes sense.
They don't pay taxes. So, fine, issue stock to the government. The government can hold or sell the stock when it makes sense.
> There is plenty of money, we could tax something like 5% of stock buybacks and completely rebuild our entire society from the ground up
There isn't plenty of money in fact. Your 5% tax would get you $30 to $50 billion depending on the year. You're not rebuilding much with that. You can build a few miles of NYC subway with that, and maybe a quarter of a high-speed rail line in part of California.
You need to fill in the trillion dollar budget deficit first of all, which overwhelmingly consists of rapidly expanding entitlement spending deficits where we're not bringing in enough tax revenue. There is only one way to mathematically accomplish that in reality: raise income taxes dramatically on the top 1/3.
That only gets you back to break-even. It doesn't pay down the federal debt ($600b per year in interest) and it doesn't provide any expansion for spending programs new or old.
The US is already spending as much on its total government system (Federal + State + Local) as what advanced welfare states in Western Europe spend in total on their government systems. And we're getting a horrible return on that money almost across the board. The first thing we should do is improve the effectiveness of the money we're already spending while we attempt to bring down the deficits. For what we're already spending, the whole of the US should look like Denmark or Sweden. Why doesn't it?
Everyone likes to say one thing first in response: military spending. Ok, slash $150 billion off of that to bring it down to 2.5-3% of GDP type levels (and freeze it for a decade). Next you need another $850b to $1.2t minimum each year in new tax revenue just to balance the budget this decade. It will require immense income taxation increases. There are no other sources that can come close to filling that epic hole.
There isn't plenty of money in fact. Your 5% tax would get you $30 to $50 billion depending on the year. You're not rebuilding much with that. You can build a few miles of NYC subway with that, and maybe a quarter of a high-speed rail line in part of California.
You need to fill in the trillion dollar budget deficit first of all, which overwhelmingly consists of rapidly expanding entitlement spending deficits where we're not bringing in enough tax revenue. There is only one way to mathematically accomplish that in reality: raise income taxes dramatically on the top 1/3.
That only gets you back to break-even. It doesn't pay down the federal debt ($600b per year in interest) and it doesn't provide any expansion for spending programs new or old.
The US is already spending as much on its total government system (Federal + State + Local) as what advanced welfare states in Western Europe spend in total on their government systems. And we're getting a horrible return on that money almost across the board. The first thing we should do is improve the effectiveness of the money we're already spending while we attempt to bring down the deficits. For what we're already spending, the whole of the US should look like Denmark or Sweden. Why doesn't it?
Everyone likes to say one thing first in response: military spending. Ok, slash $150 billion off of that to bring it down to 2.5-3% of GDP type levels (and freeze it for a decade). Next you need another $850b to $1.2t minimum each year in new tax revenue just to balance the budget this decade. It will require immense income taxation increases. There are no other sources that can come close to filling that epic hole.
I'm not sure how much you and I would agree on concrete politics, but I do like that you're giving some pushback against "just tax more" to move us towards "tax more, fight rentierism, and fight cost disease." You shouldn't be downvoted into the gray for pointing these things out.
Everything you said was reasonable and even corroborated by other posters, don't know why you are downvoted.
I don't really understand why higher income taxes is such a big deal in the US. Instead of income taxes you seem to be fine with inflated rents to landlords, massive mortgages, unaffordable child care and education and so on. So regular payments are fine as long as it's not to the government?
> regular payments are fine as long as it's not to the government?
I live in a high-tax city in a high-tax state and don't do anything aggressive to reduce my tax burden. But if my landlord screws me, I can move. Universities charge an arm and a leg, but there are alternatives, from community colleges to state and foreign schools. Taxes are unavoidable.
I live in a high-tax city in a high-tax state and don't do anything aggressive to reduce my tax burden. But if my landlord screws me, I can move. Universities charge an arm and a leg, but there are alternatives, from community colleges to state and foreign schools. Taxes are unavoidable.
I'm sorry but that's some free market bubble nonsense, most people can't "just move" and just "pick another uni".
It's not that you magically can find some other landlord that's doesn't offer something with 3x rent compared to western-Europe.
It's not that you magically can find some other landlord that's doesn't offer something with 3x rent compared to western-Europe.
> that's some free market bubble nonsense
You're asking to understand a different perspective. I'm trying to offer that perspective.
> most people can't "just move" and just "pick another uni"
No, but they can weigh the cost of living in e.g. Manhattan versus Queens versus upstate. And they can weigh the cost ex ante of a private university versus community college.
Housing and education have high lock-in. But there is a degree of competition and choice with respect to incurring their costs. That doesn't exist with taxes, which makes some people more cautious about them.
You're asking to understand a different perspective. I'm trying to offer that perspective.
> most people can't "just move" and just "pick another uni"
No, but they can weigh the cost of living in e.g. Manhattan versus Queens versus upstate. And they can weigh the cost ex ante of a private university versus community college.
Housing and education have high lock-in. But there is a degree of competition and choice with respect to incurring their costs. That doesn't exist with taxes, which makes some people more cautious about them.
Who can do that? You're assuming that people can downsize. For most rent, childcare, healthcare etc is just another recurring bill, not unlike taxes.
Islam has instituted a 2.5% "charity tax" (Zakah) for over 1400 years now. It's not that those politicians are unimaginative, it's that they're either willfully neglectful or ignorant. Great political qualities to have /s
The company my wife works at are trying to take away benefits while receiving tons of money from the government (almost 1 billion)... Ie: no more 401k matching, no more pay differencial for night employees, etc...
> we could tax something like 5% of stock buybacks and completely rebuild our entire society from the ground up.
In 2018, there were a total of $800 billion of stock buybacks, and this was an utterly exceptional moment when corporations were essentially forced to make them due to tax advantage. So even if your theoretical tax didn't impact buyback behavior at all (it would) and buyback rates returned to 2018 levels (they won't), you would raise $40 billion per year. It would raise federal tax revenue around 1%. How do you envision spending that to completely rebuild society?
In 2018, there were a total of $800 billion of stock buybacks, and this was an utterly exceptional moment when corporations were essentially forced to make them due to tax advantage. So even if your theoretical tax didn't impact buyback behavior at all (it would) and buyback rates returned to 2018 levels (they won't), you would raise $40 billion per year. It would raise federal tax revenue around 1%. How do you envision spending that to completely rebuild society?
If buybacks were banned, would companies be so fragile that they require massive bailouts?
If these buyback didn't create extremely overvalued/frothy markets, would the bailouts need to be as big?
I think over leveraging is as toxic for markets as many intuitively expect.
If these buyback didn't create extremely overvalued/frothy markets, would the bailouts need to be as big?
I think over leveraging is as toxic for markets as many intuitively expect.
There's this strange belief a lot of people have that leaders care about regular folks. They don't, they only care about themselves, and the system as it is is what got them where they are. Thus, they are incentivized to keep things the way they are. Not just that, but in a plutocracy like the US, leaders want to make sure that poors stay poor. The worst possible outcome for the rich and powerful is that it becomes easier for other people to climb the ladder, and harder for them to increase the size of the gap.
Isn’t this already taxed since it’s income?
Can someone explain to me the obsession with buybacks and not dividends?
Can someone explain to me the obsession with buybacks and not dividends?
>Isn’t this already taxed since it’s income?
Buybacks confer additional advantages as well. The gains can be deferred, which can be advantageous when saving for retirement because your marginal tax rate when retired will likely be lower (because less income). For foreign investors, buybacks aren't subject to withholding tax. For the executives, buybacks also benefit them because their compensation tend to be tied to shared price.
Buybacks confer additional advantages as well. The gains can be deferred, which can be advantageous when saving for retirement because your marginal tax rate when retired will likely be lower (because less income). For foreign investors, buybacks aren't subject to withholding tax. For the executives, buybacks also benefit them because their compensation tend to be tied to shared price.
>This is absurd. There is plenty of money, we could tax something like 5% of stock buybacks and completely rebuild our entire society from the ground up.
Even with a 5% tax, buybacks would still be better than dividends. The bigger problem is that dividends and buybacks are functionally the same (return money to shareholders), but they receive different tax treatments. Instead of trying to patch the differences with more taxes, we should make both have the same treatment when it comes to taxes.
Even with a 5% tax, buybacks would still be better than dividends. The bigger problem is that dividends and buybacks are functionally the same (return money to shareholders), but they receive different tax treatments. Instead of trying to patch the differences with more taxes, we should make both have the same treatment when it comes to taxes.
How would you do that in practice? Tax capital gains annually?
> an alternative to property/sales taxes and development fees
Development fees are a one-off revenue stream, and could fit the Ponzi scheme assertion. But property taxes? These are recurring, and could be turned to sustainably fund a community's costs.
> we could tax something like 5% of stock buybacks
Within the scope of the author's argument, this would be worse than property taxes. It's an unpredictable revenue stream. And it's unrelated to the liability side of the equation.
Development fees are a one-off revenue stream, and could fit the Ponzi scheme assertion. But property taxes? These are recurring, and could be turned to sustainably fund a community's costs.
> we could tax something like 5% of stock buybacks
Within the scope of the author's argument, this would be worse than property taxes. It's an unpredictable revenue stream. And it's unrelated to the liability side of the equation.
[deleted]
There is a concerted effort at the top of our government to subvert the republic and turn it into a new oligarchy, why we haven't openly branded certain members of congress and the current administration traitors and dealt with them appropriately is beyond me. We're passed the point where cleaning house would be seen as weakness or instability on the world stage, because the current admin is weak and unstable. Cleaning house now would reassure our allies and restore some legitimacy to our government.
I'm not suggesting violence, but that our forces responsible from protecting us against domestic threats do their job here, I think the idea that the optics of arresting a sitting president and members of congress is less worse than restoring a functioning legislative and executive branches.
I'm not suggesting violence, but that our forces responsible from protecting us against domestic threats do their job here, I think the idea that the optics of arresting a sitting president and members of congress is less worse than restoring a functioning legislative and executive branches.
In ancient Rome, the senators thought that it was in the good of the republic to disband Julius Caesar. A group of them banded together and killed him.
What they failed to realize was how popular he was with the lower and middle classes. His reign had drastically improved their quality of life. His murder led to a string of civil wars and instability.
Think hard before disbanding populist figures.
What they failed to realize was how popular he was with the lower and middle classes. His reign had drastically improved their quality of life. His murder led to a string of civil wars and instability.
Think hard before disbanding populist figures.
Your point is noted, but Trump is popular with less than 44% [0] of people currently and has done nothing to improve their lives. Comparing the current admin with Caesar is giving a huge compliment to them, that they do not deserve.
[0] https://projects.fivethirtyeight.com/trump-approval-ratings/
[0] https://projects.fivethirtyeight.com/trump-approval-ratings/
The opposition party could easily end this if they actually tried and offered a competing vision and a compelling candidate. They didn’t do this in 2016 and neither are they doing it in 2020. No need to kill anybody.
I completely agree, and while Trump is my main focus of the above comment I honestly think we need to do full scrutiny of both GOP and Dems I imagine we could hand out a lot of arrests on both sides of the isle. The corruption runs both ways and I don't find democrats as some amazing preferable choice, in fact Joe is a wet noodle. I think we need a reset all around which I'd be comfortable with being achieved by a combination of term limits and arrests for those who have broken the laws.
I never understand why people think term limits would do anything. Instead of long term corrupt people you would get a steady flow of people who jump from industry to government, do the bidding of the industry, and then go back. The result would be exactly the same.
Because the full view is term limits + lobbying is illegal + any thing that looks like what you described triggers an investigation for something like "corruption of a public servant" + none of the money as speech + reduced campaign time + no pacs or super pacs + a few more other things.
There needs to be a multifaceted implementation of new policy.
Term limits in a vacuum are useless, but if we didn't have a government that was pretty much a proxy for large corporations we could do neat things that would make anyone engaging in that type of arrangement's life a lot harder.
There needs to be a multifaceted implementation of new policy.
Term limits in a vacuum are useless, but if we didn't have a government that was pretty much a proxy for large corporations we could do neat things that would make anyone engaging in that type of arrangement's life a lot harder.
I actually don't think that we need term limits. There is something to be said for experience. Instead we should take on the rest of the policies you mentioned, but also limit members of congress to have strict W-2-only incomes. With the exception of perhaps a 401(k) or pension plan, we need to limit the earning power of a congressional seat.
I would also go so far as to say that members of congress should not be allowed to be active in the markets for some years (8?) after they leave office and their should also be limits on jobs they are allowed to take for some time after they leave office as well. I.e. they can't go sit on a board and get paid 7-figures right after giving up their seat.
I would also go so far as to say that members of congress should not be allowed to be active in the markets for some years (8?) after they leave office and their should also be limits on jobs they are allowed to take for some time after they leave office as well. I.e. they can't go sit on a board and get paid 7-figures right after giving up their seat.
“if we didn't have a government that was pretty much a proxy for large corporations “
I agree with that. I just don’t think term limits will make a difference in this effort.
I agree with that. I just don’t think term limits will make a difference in this effort.
davidw(2)
American Patriots were only 40-45% of the population in the 13 colonies [0].
[0]https://books.google.com/books?id=xK1NuzpAcH8C&pg=PA235#v=on...
[0]https://books.google.com/books?id=xK1NuzpAcH8C&pg=PA235#v=on...
44 is indisputably a minority.
It is still enough people that I wouldn’t want to see the corresponding headline.
It is still enough people that I wouldn’t want to see the corresponding headline.
[deleted]
Well, I see his approval rating barely changed the last 3 years by the link you posted. It was 43.4% on March 2017 and it's 44% now. It means a huge chunk of the American public likes what he has been doing the last years, or at least can't find a better candidate.
I'm afraid it's wishful thinking to think most Americans are sick of Trump. Some are, for sure, but the data you posted isn't showing anything significant happened.
He will likely win again from what I'm seeing.
I'm afraid it's wishful thinking to think most Americans are sick of Trump. Some are, for sure, but the data you posted isn't showing anything significant happened.
He will likely win again from what I'm seeing.
Trump is a symptom of a deeper cultural problem for which we are all participants. Take him out too viciously and the entire country would implode forever. Our chance is to address the problem directly by economic relief for rural poor (among others) so that the symptom resolves.
We can kill two birds with one stone: let's onshore a productive non-virtual, "building shit" economy, and use geographical anti-concentration laws to ensure areas outside the professional-class urban centers get a slice of the pie.
The way to reduce government corruption, regulatory capture and corporate rent seeking is to dramatically increase government power and give it control over a greater share of the economy.
Color me skeptical.
Color me skeptical.
The anti-concentration laws seem like a super idea since it would create incentive for building a ton of infrastructure in areas that have been allowed to degrade.
“geographical anti-concentration laws”
Any examples of this in practice?
Any examples of this in practice?
https://washingtonmonthly.com/magazine/novdec-2015/bloom-and...
>What, then, is the missing piece? A major factor that has not received sufficient attention is the role of public policy. Throughout most of the country’s history, American government at all levels has pursued policies designed to preserve local control of businesses and to check the tendency of a few dominant cities to monopolize power over the rest of the country. These efforts moved to the federal level beginning in the late nineteenth century and reached a climax of enforcement in the 1960s and ’70s. Yet starting shortly thereafter, each of these policy levers were flipped, one after the other, in the opposite direction, usually in the guise of “deregulation.” Understanding this history, largely forgotten in our own time, is essential to turning the problem of inequality around.
...
>Sometimes referred to by its supporters as “the Magna Carta of Small Business,” Robinson-Patman prevented the formation of chain stores even remotely approaching the scale and power of today’s Walmart or Amazon by cracking down on such practices as selling items below cost (a practice known as “loss leading”). The legislation also prohibited the chains from using their market power to extract price concessions from their suppliers, Similarly, the Miller-Tydings Act, enacted by Congress in 1937, put a floor on retail discounting, thereby ensuring that large chains headquartered in distant cities didn’t come to dominate the economies of local communities. This did not prevent innovation in retailing, such as the emergence of brand-spanking-new supermarkets to replace small-scale butcher shops and green grocers. But into the 1960s, these and similar laws would ensure that no supermarket chain would control more than about 7 percent of any local market.
>What, then, is the missing piece? A major factor that has not received sufficient attention is the role of public policy. Throughout most of the country’s history, American government at all levels has pursued policies designed to preserve local control of businesses and to check the tendency of a few dominant cities to monopolize power over the rest of the country. These efforts moved to the federal level beginning in the late nineteenth century and reached a climax of enforcement in the 1960s and ’70s. Yet starting shortly thereafter, each of these policy levers were flipped, one after the other, in the opposite direction, usually in the guise of “deregulation.” Understanding this history, largely forgotten in our own time, is essential to turning the problem of inequality around.
...
>Sometimes referred to by its supporters as “the Magna Carta of Small Business,” Robinson-Patman prevented the formation of chain stores even remotely approaching the scale and power of today’s Walmart or Amazon by cracking down on such practices as selling items below cost (a practice known as “loss leading”). The legislation also prohibited the chains from using their market power to extract price concessions from their suppliers, Similarly, the Miller-Tydings Act, enacted by Congress in 1937, put a floor on retail discounting, thereby ensuring that large chains headquartered in distant cities didn’t come to dominate the economies of local communities. This did not prevent innovation in retailing, such as the emergence of brand-spanking-new supermarkets to replace small-scale butcher shops and green grocers. But into the 1960s, these and similar laws would ensure that no supermarket chain would control more than about 7 percent of any local market.
Thank you.
Exactly, Trump is an outcome, a symptom of a deeper, more systemic cultural problem within the US.
It's not only him, look at the entire GOP, and what forces are at play to keep these people in place.
The people currently in charge are there to protect historic interests/positions and they know they will lose them forever in a fair election. Because most of the country has moved on culturally.
It's not only him, look at the entire GOP, and what forces are at play to keep these people in place.
The people currently in charge are there to protect historic interests/positions and they know they will lose them forever in a fair election. Because most of the country has moved on culturally.
The cultural lines with the two parties seem to be changing. Back in early 00's, I remember the conservatives were saying you can't say ______ because God forbids it. Now it seems to be liberals saying you can't say _______ because it offends XYZ. I don't know why this is happening but it is kind of strange to see as censorship and silencing has never been a popular position
Liberals have always said "you can't say X" for all sorts of things, not as a matter law, but because they don't want people to be assholes. The term "PC" was invented a looong time ago for this.
The only thing that's changed is that people are pretending that it's new and unprecedented, as a way to garner more outrage.
The only thing that's changed is that people are pretending that it's new and unprecedented, as a way to garner more outrage.
[deleted]
vvG94KbDUtRa(2)
We have elections coming. I am all for arrests, impeachments, and the like, but boy, it would be super helpful if we coul prime the pump by removing some of these ghouls at the top. That signals a mandate.
Many of you live in San Francisco. Your House rep, Nancy Pelosi, with whom I am sure you are familiar, has a serious challenger in Shahid Buttar. He is pushing to debate her, which should be the bare minimum for electoral rivals, yet AFAIK no date has been set. No one in the media or in the political establishment is holding her feet to the fire.
We could start there.
Many of you live in San Francisco. Your House rep, Nancy Pelosi, with whom I am sure you are familiar, has a serious challenger in Shahid Buttar. He is pushing to debate her, which should be the bare minimum for electoral rivals, yet AFAIK no date has been set. No one in the media or in the political establishment is holding her feet to the fire.
We could start there.
eli_gottlieb(3)
What you're talking about won't come without a revolution. Yes, a freedom movement kinda revolution like Boston Tea Party of 1800s in America or the 1942 Quit India Movement against the British. Today's people are probably too feeble for something like that. They're afraid of even speaking against the system/establishment even when they know that some parts of that system might be rotten to the core.
It's pretty unfortunate that article 5 conventions are so hard to get started. It's the only bloodless way I see to fix things.
> why we haven't openly branded certain members of congress and the current administration traitors and dealt with them appropriately is beyond me.
What is "appropriate" for "traitors"? Execution? Prison? Being stripped of their rights, including the right to participate in the democratic process?
You see, the irony is that alleging vague subversive activity from your political enemies and then dealing with the "traitors" like this subverts the republic, turning it into a new oligarchy. It's a very banana-republic suggestion.
What is "appropriate" for "traitors"? Execution? Prison? Being stripped of their rights, including the right to participate in the democratic process?
You see, the irony is that alleging vague subversive activity from your political enemies and then dealing with the "traitors" like this subverts the republic, turning it into a new oligarchy. It's a very banana-republic suggestion.
It's almost like we have laws that dictate how we deal with them and as such the appropriate way to deal with them is what our laws state.
https://www.law.cornell.edu/uscode/text/18/2381
https://www.law.cornell.edu/uscode/text/18/2381
So for the crime of treason, you advocate death — or at least five-year prison sentences with $10,000+ fines — for various not-explicitly-identified Trump administration members. That's cool and edgy, I guess. But, well....
It's almost like our Constitution spells out how "Treason against the United States, shall consist only in levying war against them, or in adhering to their enemies, giving them aid and comfort." https://www.law.cornell.edu/constitution/articleiii
It's almost like James Madison knew from experience there'd be someone who would float this type of proposal, and so codified a rebuke into the supreme law of the land, some 200 years in advance.
(Postscript. The obvious next step is for you to change your mind and stop saying these random members are committing oligarchycrimes and say instead that Trump himself is giving "aid and comfort" to our enemies in Russia. I'm sure there's some lovely jurisprudence to be had getting that laughed out of the courts and wish you the best of luck.)
It's almost like our Constitution spells out how "Treason against the United States, shall consist only in levying war against them, or in adhering to their enemies, giving them aid and comfort." https://www.law.cornell.edu/constitution/articleiii
It's almost like James Madison knew from experience there'd be someone who would float this type of proposal, and so codified a rebuke into the supreme law of the land, some 200 years in advance.
(Postscript. The obvious next step is for you to change your mind and stop saying these random members are committing oligarchycrimes and say instead that Trump himself is giving "aid and comfort" to our enemies in Russia. I'm sure there's some lovely jurisprudence to be had getting that laughed out of the courts and wish you the best of luck.)
Right but, "or in adhering to their enemies, giving them aid and comfort." is the part Trump is a traitor for and Mitch + a whole gaggle of flunkies beneath them.
Looks like I called it, and wrote it in my postscript, even as you were replying! Good show.
Porque no los dos? I think they're guilty of a lot of things not one or the other but being taken down by treason for aiding foreign powers solves the oligarchy issue. I think he's pretty much walking garbage.
There needs to be some sort of reset function which removes everyone from office and replaces them with randomly chosen citizens. It's too easy for corruption to continue otherwise since the pipeline has been established to subvert elections.
What leads you to believe random citizens can't be corrupt?
I think his point is not that random citizens can't be corrupt, it's that a random assortment of citizens are less likely to be corrupt (and probably more likely to call out corruption if they see it).
A random assortment of citizens seems just as likely to be more corrupt than less, if it's even possible to measure that objectively.
However, it does seem likely to me that random citizens would be less capable of governing effectively in areas where actual knowledge of law, politics or some degree of domain knowledge is required.
However, it does seem likely to me that random citizens would be less capable of governing effectively in areas where actual knowledge of law, politics or some degree of domain knowledge is required.
Money buys all things, including support for the Oligarchs.
The current administration was elected to clean house. They're just supporting a different set of oligarchs than earlier administrations.
[deleted]
If you taxed 5% of stock buy backs, you’d probably collect $0 as that money is shifted elsewhere.
I'm getting a bit tired of seeing these bizarre and unsupported screeds from strongtowns. The idea that infrastructure is bankrupting the american city/town is totally unsupported. Spending on things like roads is a small percentage of government. As a random cite, the Urban institute puts it at 6%:
https://www.urban.org/policy-centers/cross-center-initiative...
https://www.urban.org/policy-centers/cross-center-initiative...
Figures like that are not how much cities need to spend to maintain everything they have, but how much they choose to spend on maintenance in a single year. The problem is almost every city engages in deferred maintenance - ie. they don’t spend enough to maintain everything they had and somewhere between many to most roads are allowed to deteriorate.
At the state and federal level the ASCE reports on this every four years: https://www.infrastructurereportcard.org/
They claim that actual funding, just for roads, is 981 Billion while the need is 2 trillion.
Again that’s just for roads.
Usually there’s one comment like this on each Strong Towns thing that gets on hacker news, and I get it, this crowd wants to dig into the numbers. The challenge is that StrongTowns is a blog which posts bite sized bits of content every day, And their audience is a very broad national readership of “regular folks” whose eyes tend to glaze over when you show them a spreadsheet. So a lot of the Strong Towns daily posts are narrative centric like this without being focused on the data.
EDIT: I had to dig a bit, but this series is more spreadsheet-y, and probably of more interest to the HN crowd: https://www.strongtowns.org/journal/2019/12/17/best-of-2019-...
Also these articles are pretty good intro pieces:
- https://www.strongtowns.org/journal/2017/1/29/the-cost-of-au...
- https://www.strongtowns.org/journal/2015/9/14/lafayette-pipe...
At the state and federal level the ASCE reports on this every four years: https://www.infrastructurereportcard.org/
They claim that actual funding, just for roads, is 981 Billion while the need is 2 trillion.
Again that’s just for roads.
Usually there’s one comment like this on each Strong Towns thing that gets on hacker news, and I get it, this crowd wants to dig into the numbers. The challenge is that StrongTowns is a blog which posts bite sized bits of content every day, And their audience is a very broad national readership of “regular folks” whose eyes tend to glaze over when you show them a spreadsheet. So a lot of the Strong Towns daily posts are narrative centric like this without being focused on the data.
EDIT: I had to dig a bit, but this series is more spreadsheet-y, and probably of more interest to the HN crowd: https://www.strongtowns.org/journal/2019/12/17/best-of-2019-...
Also these articles are pretty good intro pieces:
- https://www.strongtowns.org/journal/2017/1/29/the-cost-of-au...
- https://www.strongtowns.org/journal/2015/9/14/lafayette-pipe...
>They claim that actual funding, just for roads, is 981 Billion while the need is 2 trillion.
So we need to double spending to 12% of state/local expenditures? Even if we accept that number it's just not anywhere near the level of bankrupting cities.
So we need to double spending to 12% of state/local expenditures? Even if we accept that number it's just not anywhere near the level of bankrupting cities.
> Spending on things like roads is a small percentage of government.
I believe ST's point is that this is only true because cities and towns use cash accounting, and so the depreciation costs of roads and other infrastructure are hidden. Once these wear out and have to be replaced, these cities will find themselves in a very deep hole.
Note that cash accounting is so misleading that it's literally illegal for most companies to use it; municipalities get to be an exception because it helps tax cuts seem more viable than they really are, and voters want to be lied to in this way.
I believe ST's point is that this is only true because cities and towns use cash accounting, and so the depreciation costs of roads and other infrastructure are hidden. Once these wear out and have to be replaced, these cities will find themselves in a very deep hole.
Note that cash accounting is so misleading that it's literally illegal for most companies to use it; municipalities get to be an exception because it helps tax cuts seem more viable than they really are, and voters want to be lied to in this way.
Roads don’t wear out and “have to be replaced”. They are continuously maintained, which coincidentally fits perfectly with cash accounting.
That's a nice fantasy world you live in.
In reality the "continuous maintenance" you tout is continually deferred, kicking the can down the road (no pun intended). The Volcker Alliance estimated that we have a total of over $1 trillion in deferred maintenance as of last November [1]. The Department of Interior alone quoted $16.4 billion in deferred maintenance on their infrastructure at the end of 2018 [2], which is about 80% of their annual budget [3]. The infrastructure of cities, states, and other federal departments dwarfs that of DoI.
[1] https://www.volckeralliance.org/sites/default/files/attachme...
[2] https://www.doi.gov/ocl/deferred-maintenance-backlog
[3] https://www.doi.gov/sites/doi.gov/files/uploads/fy2020_bib_a...
In reality the "continuous maintenance" you tout is continually deferred, kicking the can down the road (no pun intended). The Volcker Alliance estimated that we have a total of over $1 trillion in deferred maintenance as of last November [1]. The Department of Interior alone quoted $16.4 billion in deferred maintenance on their infrastructure at the end of 2018 [2], which is about 80% of their annual budget [3]. The infrastructure of cities, states, and other federal departments dwarfs that of DoI.
[1] https://www.volckeralliance.org/sites/default/files/attachme...
[2] https://www.doi.gov/ocl/deferred-maintenance-backlog
[3] https://www.doi.gov/sites/doi.gov/files/uploads/fy2020_bib_a...
When they are maintained by resurfacing on a 15-20 year lifecycle, and regrading on a 50 year lifecycle, as is common with residential roads, that leaves plenty of time for ponzi-like growth to occur.
Road are also listed on city books as an asset, with a positive cash value, instead of a liability. But unfortunately, future road maintenance is a liability just like future pension payments, and cities can’t actually sell roads to pay for other things. That future payment is generally not accounted for anywhere by any city.
The accounting practices around infrastructure are quite surprisingly bad.
The accounting practices around infrastructure are quite surprisingly bad.
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roads certainly do need to be replaced, i.e., repaved. in my three weeks of travel in china, i never once encountered a single road worse than the roads i encounter everyday in a major metropolitan city in the u.s. and i pay heavy taxes.
Bridges do, however.
Government pensions on the other hand...
Cash Spending != Costs, and that is the point. Cash accounting is hiding the massive maintenance and depreciation costs that are accumulating.
In a nutshell, what is the Strongtowns thesis?
Virtually nothing in this article is cited or backed up with any data at all. Clicking through the links takes me to other pages with similar bold claims and a similar lack of citations or data.
Entire site seems to exist to sell me a book or for me to donate money so I can become a "member."
Just what the hell is this doing at the top of Hacker News? Anti-American title so people upvote it straight to the top without even reading it? This is garbage content that isn't even remotely related to tech news.
Entire site seems to exist to sell me a book or for me to donate money so I can become a "member."
Just what the hell is this doing at the top of Hacker News? Anti-American title so people upvote it straight to the top without even reading it? This is garbage content that isn't even remotely related to tech news.
There are various case studies linked here: https://www.strongtowns.org/the-growth-ponzi-scheme
> Anti-American title so people upvote it straight to the top without even reading it?
What kind of reflexive jingoism is this? Just because something critiques one aspect of the US doesn't instantly make it "anti-American".
> Anti-American title so people upvote it straight to the top without even reading it?
What kind of reflexive jingoism is this? Just because something critiques one aspect of the US doesn't instantly make it "anti-American".
Is there a case study comparing American and European cities? Reading the article as a European, I do not find anything that is different from Europe.
Also, is going into debt to finance infrastructure really a problem if total debt stays at ~100% of GDP?
Overall, the article seems very alarmist ("Something is broken and we all know it.") without any data to back it up.
Also, is going into debt to finance infrastructure really a problem if total debt stays at ~100% of GDP?
Overall, the article seems very alarmist ("Something is broken and we all know it.") without any data to back it up.
>What kind of reflexive jingoism is this? Just because something critiques one aspect of the US doesn't instantly make it "anti-American"
The arguments made in this article are not specific to US cities or towns. Go to virtually any country in the world and it is the same.
I can't think of any other reason for this article to have made it to the absolute top of Hacker News. It certainly didn't make it based on the content of the article.
The arguments made in this article are not specific to US cities or towns. Go to virtually any country in the world and it is the same.
I can't think of any other reason for this article to have made it to the absolute top of Hacker News. It certainly didn't make it based on the content of the article.
It's very hard to take the article seriously without actual numbers. Why not find an example town, go over its finances and quantify the expected deferred maintenance compared with its income? If the town stopped growing and needed to make up revenue without counting on growth, where would it come from? Sales tax increases? Property tax? Government transfer payments? How much hardship would taxing the stakeholders the balance cause?
It's not exactly what you wanted but they do have a "strong town test" [1] that looks to have at least some semblance of a quantitative aspect to it.
[1] https://www.strongtowns.org/journal/2017/11/1/take-the-stron...
[1] https://www.strongtowns.org/journal/2017/11/1/take-the-stron...
They do exactly this with their case studies. There are several linked in this post: https://www.strongtowns.org/the-growth-ponzi-scheme
Not even close (case studies linked below). Their examples only look at individual projects from several cities, instead of whole cities. They convincingly show a few houses paying $252/year in property taxes will only support X sq ft of road. But that's not really surprising-- more dense houses paying $1000/year property taxes in some other part of the city will subsidize the other parts and the city will avoid financial ruin.
https://www.strongtowns.org/journal/2011/6/14/the-growth-pon...
https://www.strongtowns.org/journal/2011/6/14/the-growth-pon...
> But that's not really surprising-- more dense houses paying $1000/year property taxes in some other part of the city will subsidize the other parts and the city will avoid financial ruin.
1. That itself is not great. There's no compelling reason for the government to subsidize things that way. Why deliberately push a form of development that's horrible for the city finances? Modern zoning rules usually force that kind of thing to exist, for no good reason. This is one of the things strongtowns talks about.
2. Some cities don't have a dense core with enough activity to subsidize the sprawly areas.
1. That itself is not great. There's no compelling reason for the government to subsidize things that way. Why deliberately push a form of development that's horrible for the city finances? Modern zoning rules usually force that kind of thing to exist, for no good reason. This is one of the things strongtowns talks about.
2. Some cities don't have a dense core with enough activity to subsidize the sprawly areas.
There's a compelling reason: that encourages city growth into the subsidized areas.
...but without the zoning rules, the city would still grow. It would just grow in a more financially sustainable way.
You wouldn't even be blocking sprawly development if that's really what the market wanted. You would only be allowing more dense development. Which would only happen if the market preferred it.
You wouldn't even be blocking sprawly development if that's really what the market wanted. You would only be allowing more dense development. Which would only happen if the market preferred it.
> few houses paying $252/year
That's 10-20% of a typical property tax bill. They're fudging the numbers somewhere.
That's 10-20% of a typical property tax bill. They're fudging the numbers somewhere.
For those who want to see a more quantitative approach, that's totally fair. Joe Minicozzi with Urban3 is closely associated with Strong Towns and does some great studies with detailed numbers to back up what he's saying.
https://www.strongtowns.org/journal/2018/2/1/the-surprising-...
It's worth watching one of his presentations, they're very well done, and very data-oriented. Here's a recent one:
https://www.youtube.com/watch?v=yicYz2PO1IQ&t=23s
https://www.strongtowns.org/journal/2018/2/1/the-surprising-...
It's worth watching one of his presentations, they're very well done, and very data-oriented. Here's a recent one:
https://www.youtube.com/watch?v=yicYz2PO1IQ&t=23s
Debt outside of mortgages has increased.
Housing prices have increased.
People are marrying later and renting longer.
It seems like there needs to be a new solution between the mortgage and being a tenant that allows for freer movement and yet the building of ownership / investment in a place over time.
Here’s what we’re working on towards that end.
https://www.konarahomes.com/
Looking for partners to solve this very important and difficult problem.
Housing prices have increased.
People are marrying later and renting longer.
It seems like there needs to be a new solution between the mortgage and being a tenant that allows for freer movement and yet the building of ownership / investment in a place over time.
Here’s what we’re working on towards that end.
https://www.konarahomes.com/
Looking for partners to solve this very important and difficult problem.
This looks very interesting. FWIW let the "unit" be a whole neighborhood.
Living neighborhoods: https://www.livingneighborhoods.org/ht-0/bln-exp.htm
And integrate regenerative food forests. See Village Homes in Davis, model eco-suburb ( https://en.wikipedia.org/wiki/Village_Homes )
Add carbon-neutral small-scale integrated alcohol fuel production ( http://alcoholcanbeagas.com )
- - - -
My mom lives in a neighborhood that was all built together at the same time, it's owned and operated by a corporation. There are a few downsides but the upsides are enormous:
- No wires. All that was run underground. It's so worth it. You can't understand how ugly and nasty the wires are until you've lived without them.
- Central laundry on each block. High efficiency machines. Regular maintenance (although by a contractor, and they are sometimes slow to respond.)
- Infinite hot water. The hot water heater is industrial, huge, it never runs out!
- On call professional maintenance staff! Plugged sink or toilet? One call to the office and the guy will be there later that day. Included in the rent.
- Parking space included in the small parking lots & garages.
- Outdoor maintenance, landscaping, yardwork, repainting, repairing the roofs, etc. All of that is taken care of.
A good management company is IMO a better bet than going it alone.
Living neighborhoods: https://www.livingneighborhoods.org/ht-0/bln-exp.htm
And integrate regenerative food forests. See Village Homes in Davis, model eco-suburb ( https://en.wikipedia.org/wiki/Village_Homes )
Add carbon-neutral small-scale integrated alcohol fuel production ( http://alcoholcanbeagas.com )
- - - -
My mom lives in a neighborhood that was all built together at the same time, it's owned and operated by a corporation. There are a few downsides but the upsides are enormous:
- No wires. All that was run underground. It's so worth it. You can't understand how ugly and nasty the wires are until you've lived without them.
- Central laundry on each block. High efficiency machines. Regular maintenance (although by a contractor, and they are sometimes slow to respond.)
- Infinite hot water. The hot water heater is industrial, huge, it never runs out!
- On call professional maintenance staff! Plugged sink or toilet? One call to the office and the guy will be there later that day. Included in the rent.
- Parking space included in the small parking lots & garages.
- Outdoor maintenance, landscaping, yardwork, repainting, repairing the roofs, etc. All of that is taken care of.
A good management company is IMO a better bet than going it alone.
Would love to hear more about your experience. Can you email "websitename"@gmail.com
Also, its very important that we can also partner with or be a good management company.
That's actually where we've started as we figure out the rest of this. We manage 33 tenants / units currently.
That's actually where we've started as we figure out the rest of this. We manage 33 tenants / units currently.
> We manage 33 tenants / units currently.
That's outstanding!
konarahomes, yeah? Will do. I signed up for your newsletter already this morning.
I'm not a domain expert in real estate, urban design, or regenerative agriculture (I took a Permaculture certification class from "Farmer Dave" Bloom, the "Alcohol can be a Gas" guy, but that's about it) but I'm really passionate about the subject.
If I had the capital I would buy some raw land (preferably damaged-but-not-a-superfund-site rather than pristine wilderness) and create something like Village Homes, sell or lease the units, and repeat.
I'm sure demand would be high. Village Homes sold every unit before they finished building, and there's a wait list.
That's outstanding!
konarahomes, yeah? Will do. I signed up for your newsletter already this morning.
I'm not a domain expert in real estate, urban design, or regenerative agriculture (I took a Permaculture certification class from "Farmer Dave" Bloom, the "Alcohol can be a Gas" guy, but that's about it) but I'm really passionate about the subject.
If I had the capital I would buy some raw land (preferably damaged-but-not-a-superfund-site rather than pristine wilderness) and create something like Village Homes, sell or lease the units, and repeat.
I'm sure demand would be high. Village Homes sold every unit before they finished building, and there's a wait list.
But this sounds just like an apartment complex. How is it different? Is it a larger area?
It's a whole neighborhood, multiple blocks, with hundreds of townhouses and several large apartment complexes. It has its own little commercial enclave with a grocery store (that has been well-stocked this whole time!) several restaurants, a cafe, and so on. There's a community garden, a dog run, and some gyms. I think there are tennis and basketball courts somewhere too. It's also ~25 minutes away from downtown by light rail. It's almost like a self-contained small town tucked away at the edge of a large city. I didn't care for it as a kid, but now I see the value of the place.
It looks like a good idea, but since it’s both new and different for most Americans, how do we know we’re not getting scammed? Do we hire real estate attorneys to decipher the contact to explain the risks? For example, what if I’ve bought into your system for 8 years, then your company goes under? Where does my equity go? (This is just one risk example to which I don’t have the answer)
Good questions.
Not getting scammed - you may want to hire a lawyer to review any long term contract but the ownership right now is structured like a stock ownership with a vesting schedule - the ownership being tied as shadow equity in the property itself while you live there and then as you move into other properties being tied to the value of the whole portfolio.
It gets tricky in assigning ownership in a durable way. That's a key problem we're trying to solve.
Not getting scammed - you may want to hire a lawyer to review any long term contract but the ownership right now is structured like a stock ownership with a vesting schedule - the ownership being tied as shadow equity in the property itself while you live there and then as you move into other properties being tied to the value of the whole portfolio.
It gets tricky in assigning ownership in a durable way. That's a key problem we're trying to solve.
> It gets tricky in assigning ownership in a durable way
Who decides when properties should be sold? Seems like there might be contention around that.
In traditional real estate, I own my property equity without having to pay marketing costs, executive salaries, payroll/wage taxes, employment benefits, ongoing legal and accounting fees, and everything else required to run a business.
How can you cover such costs without significantly diluting the equity I earn as I rent? I’m not saying you can’t, I’m genuinely curious.
Who decides when properties should be sold? Seems like there might be contention around that.
In traditional real estate, I own my property equity without having to pay marketing costs, executive salaries, payroll/wage taxes, employment benefits, ongoing legal and accounting fees, and everything else required to run a business.
How can you cover such costs without significantly diluting the equity I earn as I rent? I’m not saying you can’t, I’m genuinely curious.
We would decide to sell properties if there were no one who wanted to live in them. But generally we don't expect to sell properties - we expect them to provide value and cash flow over time. We expect the value of the network to grow as the amount of properties in it grows.
As you have bought in over decades the cash generated from properties you previously lived/invested in, return on investment of the portfolio will end up lowering your monthly costs similar to how paying off a house would.
In traditional real estate, you own your property equity after paying realtor fees, marketing costs for mortgage companies, bank executive salaries, payroll/wages for realtors, banks, property management or the equivalent cost of fixing your own home.
We can cut out a lot of the costs of agents, a lot of the time and costs related to mortgages and find a price point that sits between rent and mortgages without a down payment. We also have far less marketing costs in the long run as our tenants have a built in incentive to stay in our network / buy houses through us apartments won't have.
If we can beat renting and people can build investment in our system when they're in the rental phase of their life they'll have built up an un-vested equity portion worth a significant amount of money. Imagine living in this system for your college years and a few years after - 7-8 years - across a few different properties. You'd have probably over $10k equity built up - depending on a few factors.
If they leave our system or don't continue financing through us they'll lose that and have to choose between a large downpayment and high realtor costs OR renting without building equity.
There's a sweet spot there. Apartment complexes make lots of money, mortgage companies make lots of money, banks make lots of money, realtors make lots of money. A company that streamlines these will make enough money and provide a better, more flexible experience.
Their margin is our opportunity :)
As you have bought in over decades the cash generated from properties you previously lived/invested in, return on investment of the portfolio will end up lowering your monthly costs similar to how paying off a house would.
In traditional real estate, you own your property equity after paying realtor fees, marketing costs for mortgage companies, bank executive salaries, payroll/wages for realtors, banks, property management or the equivalent cost of fixing your own home.
We can cut out a lot of the costs of agents, a lot of the time and costs related to mortgages and find a price point that sits between rent and mortgages without a down payment. We also have far less marketing costs in the long run as our tenants have a built in incentive to stay in our network / buy houses through us apartments won't have.
If we can beat renting and people can build investment in our system when they're in the rental phase of their life they'll have built up an un-vested equity portion worth a significant amount of money. Imagine living in this system for your college years and a few years after - 7-8 years - across a few different properties. You'd have probably over $10k equity built up - depending on a few factors.
If they leave our system or don't continue financing through us they'll lose that and have to choose between a large downpayment and high realtor costs OR renting without building equity.
There's a sweet spot there. Apartment complexes make lots of money, mortgage companies make lots of money, banks make lots of money, realtors make lots of money. A company that streamlines these will make enough money and provide a better, more flexible experience.
Their margin is our opportunity :)
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Socialist Twitter would absolutely love this.
We could also use the solution that's worked before and works now in certain places, build enough housing that housing costs are not artificially and immorally inflated so everyone can afford a modest house, even on low wages.
We could also use the solution that's worked before and works now in certain places, build enough housing that housing costs are not artificially and immorally inflated so everyone can afford a modest house, even on low wages.
I think this is very clickbaity. A ponzi scheme is an intentional scheme to defraud. Here at the worst we are talking about badly organised and budgeted government.
And there are much larger unfunded liabilities in medicare and medicaid, which is a much bigger "ponzi scheme".
And there are much larger unfunded liabilities in medicare and medicaid, which is a much bigger "ponzi scheme".
I think that calling something a pyramid scheme here is intended to be descriptive rather than a specific accusation of wrongdoing.
If something is in fact a pyramid scheme it doesn't much matter if the people in charge are smart enough to do it intentionally or are just really bad at math. Either way eventually the party ends.
If something is in fact a pyramid scheme it doesn't much matter if the people in charge are smart enough to do it intentionally or are just really bad at math. Either way eventually the party ends.
I get frustrated reading Marohn sometimes because he describes American development and it's impact extremely well, but generally avoids the number one factor driving this development, which is middle class likes suburbs and continues to demand them.
Sure, suburban development was facilitated and accelerated by the portfolio of government initiatives (highways and home loan programs), but at the core is that people were dying to get out of cities, buy a car, and have their own serene little castle with a lawn and driveway and no shared wall.
And this appetite continues to be the dominant one. While Americans seem to be rediscovering the value of human oriented streets that Marohn champions, they aren't willing to turn away from the suburbs, the way they did cities 80 years ago.
Perhaps Marohn's predictions regarding government financial collapse will come true soon, or perhaps traffic congestion reaches a breaking point that forces a change. But until then, and as long as they can afford them, Americans still want spaced out single family houses that spread out across the fruited plain.
Sure, suburban development was facilitated and accelerated by the portfolio of government initiatives (highways and home loan programs), but at the core is that people were dying to get out of cities, buy a car, and have their own serene little castle with a lawn and driveway and no shared wall.
And this appetite continues to be the dominant one. While Americans seem to be rediscovering the value of human oriented streets that Marohn champions, they aren't willing to turn away from the suburbs, the way they did cities 80 years ago.
Perhaps Marohn's predictions regarding government financial collapse will come true soon, or perhaps traffic congestion reaches a breaking point that forces a change. But until then, and as long as they can afford them, Americans still want spaced out single family houses that spread out across the fruited plain.
> but generally avoids the number one factor driving this development, which is middle class likes suburbs and continues to demand them.
The middle class can have suburbs, if they want, but they have to pay for them. Marohn's whole point is that cash accounting, federal grants, and other tricks are hiding the true costs of suburbs and keeping the price artificially (and unsustainably) low. And when prices are kept artificially low, of course there's lots of demand; that's a basic principle of economics.
But would the middle class still demand suburbs if they had to stomach the higher taxes to honestly pay for them? That is the open question.
The middle class can have suburbs, if they want, but they have to pay for them. Marohn's whole point is that cash accounting, federal grants, and other tricks are hiding the true costs of suburbs and keeping the price artificially (and unsustainably) low. And when prices are kept artificially low, of course there's lots of demand; that's a basic principle of economics.
But would the middle class still demand suburbs if they had to stomach the higher taxes to honestly pay for them? That is the open question.
>But would the middle class still demand suburbs if they had to stomach the higher taxes to honestly pay for them? That is the open question.
A huge challenge here is that no one ever has to actually face that, because they can just move to the next growing town/city/state. Depending on the area, you can either create another ring surrounding the metro, or leave the state entirely and move to the sunbelt.
In either case, the legacy cities or inner ring towns are left with the bill, and no one left to pay it. To Marohn's point, we've already seen this happen all over (particularly the rustbelt).
But my point is there's nothing to stop that pattern from continuing, as long as there's another town in the rockies or south or wherever with low taxes and plenty of land. There's just not really an impediment short of people's preferences dramatically changing, and the evidence shows that suburbs are growing.
A huge challenge here is that no one ever has to actually face that, because they can just move to the next growing town/city/state. Depending on the area, you can either create another ring surrounding the metro, or leave the state entirely and move to the sunbelt.
In either case, the legacy cities or inner ring towns are left with the bill, and no one left to pay it. To Marohn's point, we've already seen this happen all over (particularly the rustbelt).
But my point is there's nothing to stop that pattern from continuing, as long as there's another town in the rockies or south or wherever with low taxes and plenty of land. There's just not really an impediment short of people's preferences dramatically changing, and the evidence shows that suburbs are growing.
I disagree that the suburbs are the only thing that people want. The decision was made for people, not by them. Existing development patterns reflect the regulatory restrictions, as it's illegal to deviate from the way that things have been built. Want a walkable neighborhood with a corner store, parks, and transit? Good luck, because way more people want that than what has been allowed to be built, so prices have gone through the roof on the very few locations that have that.
that suburbanites like suburbs is so obvious to not need stating.
the more pertinent question is, do suburbanites like suburbs enough to pay the lion's ahare of their cost rather than being subsidized?
the answer is no, as implied in the cumulative critique.
the more pertinent question is, do suburbanites like suburbs enough to pay the lion's ahare of their cost rather than being subsidized?
the answer is no, as implied in the cumulative critique.
>that suburbanites like suburbs is so obvious to not need stating.
That's not what I said.
That's not what I said.
For a further look at this, I would recommend the book: https://www.strongtowns.org/book
It's got some bits I disagree with, but is a great way to look at things from a different point of view and contains a lot of insight.
It's got some bits I disagree with, but is a great way to look at things from a different point of view and contains a lot of insight.
Growth in the US is 20% real, 80% bubble. Every now and then the bubbles burst, the baloons deflate to their actual value. And then greed accelerates things again. Unfortunately the acceleration happens on the "promise", not the actual.
If I may add a chart, the red line is for me the actual value of the US economy (DJIA)
https://www.tradingview.com/x/fvtBtRx6/
Top line is promised profits/accident waiting to happen. Bottom line is actual value.
Another thing that pisses me off was depicted in the movie "The Big Short". There is not enough actual money/products/things to go around, so we do derivatives. I remember derivatives from my Uni years. We don't have enough/good numbers? Drop a derivative of something, inflate it, mask it, and sit back and wait. And then the balloon gets too much air, it will deflat, people (retail) will lose their money, and here we go again.
It's not growth (in the USA) unless there is a 10-year-looping wealth redistribution.
If I may add a chart, the red line is for me the actual value of the US economy (DJIA)
https://www.tradingview.com/x/fvtBtRx6/
Top line is promised profits/accident waiting to happen. Bottom line is actual value.
Another thing that pisses me off was depicted in the movie "The Big Short". There is not enough actual money/products/things to go around, so we do derivatives. I remember derivatives from my Uni years. We don't have enough/good numbers? Drop a derivative of something, inflate it, mask it, and sit back and wait. And then the balloon gets too much air, it will deflat, people (retail) will lose their money, and here we go again.
It's not growth (in the USA) unless there is a 10-year-looping wealth redistribution.
It is pretty clear that imitating growth via creative financing and debt is a pyramid scheme. However, it is more of a symptom than the cause.
[deleted]
It's been bad for our budgets -- both governments and households -- as well as our waistlines.
Part of America's problem with obesity is diet of course, and the other is lack of exercise -- with the lack of support for active transportation being an obvious and major component of that. People in many, if not most of our developed peers walk and bike far more than we do.
Part of America's problem with obesity is diet of course, and the other is lack of exercise -- with the lack of support for active transportation being an obvious and major component of that. People in many, if not most of our developed peers walk and bike far more than we do.
Another issue not mentioned is municipal bonds. City governments are addicted to debt. Municipal debt is probably larger than unaccounted municipal infrastructure costs.
Municipal debt was almost $4 trillion in 2016. That's insane. Eventually it's the Fed that will monetize municipal debt. It's just part of the larger public debt problem.
Municipal debt was almost $4 trillion in 2016. That's insane. Eventually it's the Fed that will monetize municipal debt. It's just part of the larger public debt problem.
municipal debt can pencil out positively, so debt by itself isn't necessarily bad.
critique the debt in light of the financial case behind it, not in isolation. good bills/measures should absolutely be backed with debt if they are at least revenue-neutral and provide broad and outsized positive social dividends. anything that's revenue-negative should be funded by taxes, or not funded at all.
critique the debt in light of the financial case behind it, not in isolation. good bills/measures should absolutely be backed with debt if they are at least revenue-neutral and provide broad and outsized positive social dividends. anything that's revenue-negative should be funded by taxes, or not funded at all.
This is the same idea that Éric Weinstein talks about.He calls it the Embedded Growth Obligation he has a podcast work that listening to, The Portal.
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[deleted]
The entire world economy is in fact a ponzi scheme, tho.
Echoes of Paul Virilio
State a problem, provide not even a hint for a solution. Pfff.
The rest of the blog goes over tons of solutions, just glance and this is obvious.
A false premise relentlessly repeated.
TL;DR: Suburbs are a Ponzi scheme because roads are too expensive?
I'm sorry but this doesn't make very much sense. ELI5?
I'm sorry but this doesn't make very much sense. ELI5?
Governments fund road construction with large portions of federal grants. The property taxes of many communities are nowhere near enough to maintain all of the infrastructure that they have built indefinitely.
So we are constantly building things we cannot maintain with current tax rates.
Also, roads don't generate enough economic activity to offset their costs.
So we are constantly building things we cannot maintain with current tax rates.
Also, roads don't generate enough economic activity to offset their costs.
This prior article goes into more detail: https://www.strongtowns.org/the-growth-ponzi-scheme
The author is a civil engineer that got involved with trying to make the budgetary ends meet in his town.
He concludes that the suburban development is easy and cheap to build, but it's too difficult to find the maintenance, which is why we have a huge amount of infrastructure that is falling apart.
He advocates for more sustainable development styles, that depend on less infrastructure, such as neighborhoods that are designed to be walkable for everyday needs.
I agree with him on aesthetic grounds, to me there is nothing worse than the suburban development style where there is nothing to do at your house except drive to big box stores. I want walk ability to my everyday needs, without having to drive. So I don't know about his economic arguments (but trust that he's done his homework), and really I just want more walkable neighborhoods for health and humanity.
The author is a civil engineer that got involved with trying to make the budgetary ends meet in his town.
He concludes that the suburban development is easy and cheap to build, but it's too difficult to find the maintenance, which is why we have a huge amount of infrastructure that is falling apart.
He advocates for more sustainable development styles, that depend on less infrastructure, such as neighborhoods that are designed to be walkable for everyday needs.
I agree with him on aesthetic grounds, to me there is nothing worse than the suburban development style where there is nothing to do at your house except drive to big box stores. I want walk ability to my everyday needs, without having to drive. So I don't know about his economic arguments (but trust that he's done his homework), and really I just want more walkable neighborhoods for health and humanity.
the basic thesis of strongtowns is that property tax in less dense areas is not enough to cover the cost of infrastructure. I'm not sure I'm convinced by their conclusion, but it's easy to see why a stretch of road in a city generates much more tax revenue than the same length of road in a suburb.
the city block I live on has about 30 rowhouses, each of them worth about $300k. a similar stretch of road out in the suburbs might have ten larger detached homes that are each worth about the same amount of money. if the property tax rate is the same in the suburb, the government is drawing on only a third of the tax receipts to maintain that same length of road.
the city block I live on has about 30 rowhouses, each of them worth about $300k. a similar stretch of road out in the suburbs might have ten larger detached homes that are each worth about the same amount of money. if the property tax rate is the same in the suburb, the government is drawing on only a third of the tax receipts to maintain that same length of road.
just wondering, what's wrong with letting the infrastructure crumble?
I'm not sure what you mean by this question. at a certain point, it deteriorates to the point where it is no longer safe/useful. then everyone with the means to do so will leave and the tax base collapses. I guess in the grand scheme of things it doesn't really matter if some nonviable communities die while others grow/start, but you probably wouldn't want that to happen to your community.
> then everyone with the means to do so will leave and the tax base collapses.
This answers it. thanks.
> I guess in the grand scheme of things it doesn't really matter if some nonviable communities die while others grow/start, but you probably wouldn't want that to happen to your community.
This is the exact moral sentiment I was considering as well.
This answers it. thanks.
> I guess in the grand scheme of things it doesn't really matter if some nonviable communities die while others grow/start, but you probably wouldn't want that to happen to your community.
This is the exact moral sentiment I was considering as well.
Larger detached homes are individually worth far more than townhouses.
The average townhouse is worth more than the average detached home because of where you find each type.
In what jurisdiction? E.g. Baltimore:
- https://www.zillow.com/homedetails/4219-Wickford-Rd-Baltimor... $489K, 2,200sqft - https://www.zillow.com/homedetails/1040-N-Calvert-St-Baltimo... $494K, 3,900sqft
ISTM, you pay more to detach your house, but most of the price goes into location+square footage.
- https://www.zillow.com/homedetails/4219-Wickford-Rd-Baltimor... $489K, 2,200sqft - https://www.zillow.com/homedetails/1040-N-Calvert-St-Baltimo... $494K, 3,900sqft
ISTM, you pay more to detach your house, but most of the price goes into location+square footage.
Exactly, land is expensive. The same quality detached home will always net a premium over same size townhome because of the additional land included.
if you had a large detached home in my city neighborhood, yes, it would be far more valuable. it wouldn't be more valuable than all the rowhouses you could have fit on the same lot though.
This is absurd. There is plenty of money, we could tax something like 5% of stock buybacks and completely rebuild our entire society from the ground up.
Instead our leaders just keep telling us to toughen up and get stronger while flying jets overhead in meaningless salutes. They seem to be very bad at their jobs.