The real reason is the FIAT debt based money system. The criminal private enterprise called the FED. Thats the real reason, everything else is a distraction from the truth.
There is no complex situation that can't simply be explained by humanoid, human-skin-wearing alien creatures. For example:
* Bad economy: Lizard people siphoning off a secret "lizard tax" at the highest levels of government which they then spend on their giant underground lizard carnivals. Fun for them, but disasterous for our jobs.
* Crime: Lizard people sneak into toddler's bedrooms at night and tell them story after story of heroic muggers. They brainwash children to believe that people who take others money at gunpoint are in fact the ones who will end up saving civilization. From what? The very same problems that the lizard people create!
* Global warming: Doesn't exist! The lizards have been stealing mercury from thermometers for centuries.
See, it's obvious if you just think for yourself and do some searches on the internet for "simple theories that explain everything".
Fiat currency is, of course, an improvement over previous precious metal-backed currencies. When you can't control the price of gold (or worse, leave the value of your currency as subject to private or foreign manipulation) prices become much more volatile, making it difficult to operate in the economy with much certainty. Fiat currencies also allow for the impact of recessions to be lessened by (for example) lowering the interest rates for the inter-bank loans it provides thus encouraging savings to be redistributed as consumption.
The fact that the bank is privately owned is both due to a need for independence from the political process (see Zimbabwe for exhibit A why this is a bad idea), and a relic due to the fact that banknotes were issued by a number of different institutions until it was decided that these competing standards should be replaced by one with authority vested in and financially backed by the state.
The Ascent of Money by Niall Ferguson is an easy book to get acquainted with the story and evidence supporting fiat currencies today.
I am appalled at almost everything I'm reading. Selling children, women's suffrage being a bad thing because it let "lesbian spinsters" vote, the Union being morally wrong to fight the south over slavery because it was the souths property rights?
If someone had told me these views were held by a major influence in the libertarian party I would have assumed they were some partisan with an agenda telling me lies about libertarians.
Thank you for showing me some new information
Who got these developments approved? The developers who made millions and extracted the wealth in partnership with the taxpayers. Same as it ever was.
Would I be right in restating your argument like this? "A fiat currency allows the state to inflate away loans. That incentivizes taking very large loans, which in turn means the state builds infrastructure it cannot actually afford."
Assuming it is, I'd like to note at least a few things.
On fiat currency
This is implicitly, in my reading of it, arguing fiat currency is distinct from commodity currency vis-a-vis inflation: If we had the gold standard, the state would not be able to inflate loans away, and the issue would go away.
As I'm sure you're aware, this is not the case - every major state in existence have inflated their commodity currencies away to pay state debt. If you had tried to buy a pound (lb) sterling silver using a Pound (£) Sterling in 1913, you'd be sorely disappointed.
If you're not aware of this, Adam Smiths extensive exposition on policy and inflation through dilution of metal currency in Roman, French and British history is a fascinating part of Wealth of Nations, albeit dreadfully boring due to Adams use of prose instead of tables to present his data.
On inflation
Independent of this - the argument is nonsensical to me. Yes, the state can pay off loans through inflating currency. There is a crucial aspect missing to the argument: This would only be a problem if the state acted as if this were true, but it in fact was not.
The fact is that the state can pay off debt by inflating the currency. Hence, the argument must be restated as "1) The state can pay loans through inflation, 2) the state takes on loans, because it knows it can pay them off through (1), and 3) the state is then unable to pay these loans". This is obviously a logical error.
On loans
And finally - this is not about loans. The article is a simple calculation saying "here's how much this infrastructure costs to maintain, and here is now much the tax base around it can pay for". It's not about the cities inability to pay off the initial leverage it used to first build the infrastructure, it's about building and paying off infrastructure that is incorrectly dimensioned for it's tax base.
The fact that the initial construction can be discounted through inflation does not remove the cities incentive to build infrastructure it can then pay for in perpetuity.
As far as inflation goes--you're making the original commenter's point about why the Fed is bad. They inflate away debt, in other words, it was all a confidence game. We get paid in deflated dollars and wonder aloud why the change in our pockets is worthless.
They treat money as limitless because they get tax income every year and they are thinking short-term. Not because of anything the federal government does. Not because of debt.
https://mises.org/library/what-has-government-done-our-money
The Federal Reserve fits the bill, but thats not what this article is about.