Ponzi Scheme by Owen Bailey

“As with any Ponzi scheme, new growth provides the illusion of prosperity”
 Charles Marohn, Strong Towns

With a possibility of a new bay bridge crossing we should consider this idea. Would a crossing into Kent County from Baltimore create growth? Probably at first, but consider the long term consequences of where we stand today.

I would guess in most of our minds the initial idea of investments into infrastructure equals investments in our economy. This has been the general understanding of development since the end of World War II when the US experienced a population and economic boom, which translated into the growth of Suburbia, what we think of today as the American Dream. But understand this method of development has been an experiment, and one we better understand today as we enter the third generation of Suburbia.

The development of suburbs in the US, and the construction of highways connecting where people live to where they work and attend school, has never been done on this scale anywhere else in the world. We abandoned how people built towns and communities for thousands of years and sped away with what was then a new idea. But instead of building for people, we built for the cars with little to no investments in alternatives. And now we must rely heavily on cars to get anywhere, which has put a huge burden on our land, resources, businesses, local governments, and on the people.

Today development is mostly seen as a sure and sound investment. If you build it, yes they will come, but you, through your local government, bear the responsibility to maintain it, and that expense is huge and still growing. We already have more roads in the US than we can afford. A 2017 report from the American Society of Civil Engineers shows our existing infrastructure is under funded by nearly $2 trillion, which would only bring our roads and bridges up to an “adequate” state of repair. The cost of the upkeep on all our roads and bridges takes away from investments in education, job training, healthcare, and the environment.

“Our problem was not, and is not, a lack of growth,” explains Marohn. “Our problem is 60 years of unproductive growth — growth that has buried us in financial liabilities. The American pattern of development does not create real wealth. It creates the illusion of wealth. Today we are in the process of seeing that illusion destroyed, and with it the prosperity we have come to take for granted.”

Local governments and tax payers are feeling the pinch, which will only worsen with each new infrastructure project built in the name of this now debunked idea of investment and growth.

“Like any Ponzi scheme,” writes Marohn, “there is only one way this ends.”

The alternative has to be investments into public transportation: light rail, buses, or whatever new technology we can imagine and create. Such investments would decrease traffic, lower related fatalities, and increase our quality of life.


Owen Bailey
February 2018