I essentially agree with everything except this:
Because this new pattern of growth is driven primarily by government and not private enterprise, the usual careful prudence involved in investing large sums of money flies out the window.
Effectively, all systems that rely on infinite growth on this finite planet, whether due to imperialistic (see the great land reform crises of the Roman Republic) or capitalistic (as in this case) motives, are bound to self-destruct. I don't have any trust that private enterprise, which itself thrives on the "growth economy" myth, would act any more responsibly than governments that are also indirectly beholden to those ideas and the whims of private contractors, which is where this leads me in a socialist direction rather than a libertarian direction. Market economies have no means of establishing homeostasis and are thus inevitably a series of bubbles and collapses that cause great material harm to all that they exploit and harvest. This is why the emergence of nominally "culturally left" figures who want to "save capitalism from itself" and restore its gee-whiz founding mythology like Ro Khanna and Andrew Yang has been so chilling for me, as it's their desire to take all teeth away from any movement away from these destructive falsehoods and instead rebrand "end of history" perpetual motion nonsense as progressive.
What machinations of capitalism aren't Ponzi schemes, then?
To say that this growth pattern is "the fault of capitalism" is quite reductive. Indeed, I'll agree that private influences in the government are largely responsible for spurring this kind of growth-- the best and most obvious example is probably how the car companies killed public transportation in LA. But ultimately, it takes two to tango. You can't blame private enterprise for lobbying the government unless you also blame the government for bending to that influence. When these two forces work in concert with one another, I'll be the first to agree that the average American gets screwed.
The way towns used to grow was incremental because it was driven by small-scale interests. A family built a small house on the edge of town. A baker opened a shop on the main street. People gradually invested their own money piecemeal over time, until the town eventually grew large enough to sustain a moderate tax base. This model of growth probably isn't possible anymore, but when it was the norm, it was sustainable. It did not rely on "infinite growth," as it did not expand wildly beyond its means. So to imply that private investment banks on "infinite growth" is wrong. A private investor could be anyone from a multinational developer to the aforementioned small family or baker.
The reason why we now have this problem is because city governments are too focused on growth-- at the expense of all else. Here's how (and why) this fails:
1) A developer comes to a town with a plan to build a new suburb. The developer presents the town with a deal in which the developer will build the new infrastructure (roads, pipes, etc) if the town then agrees to maintain this infrastructure in the future.
2) The town then accepts this deal. Again, cities don't
have to do this. If we had responsible leaders, they would ask serious questions such as "Do we have a large enough tax base to pay for the maintenance of this new infrastructure?" or "Is this really the most efficient way we can use this land?" But the prospect of a few hundred million dollars worth of investment in their towns blinds them. They are happy to sign off on any project that "induces growth."
As you can see, the problem here is private enterprise and government working in tandem. When a business invests in a new building, it has disincentives that prevent it from expanding beyond its means. Private interests want to keep costs as low as possible, so each step in growing the business is taken with care. The aforementioned baker would not build a massive three-story bakery as his first step if he hadn't proven that he could sustain enough business to make that investment worth it. But when a business knows it can build a huge project, make a short-term profit, and then pass the buck to taxpayers later down the road, it creates perverse incentives that give us wasteful and inefficient infrastructure.
The law is about providing people with the proper incentives to create a functioning society, but when government decides to shoulder the risk of private enterprise, businesses no longer feel any need to act with prudence. It is this interaction between the private and public sectors that causes problems like this, not the private sector alone.