This is just false, and a quick look at any municipal budget is enough to confirm it. Infrastructure costs are small fraction of spend of any municipality. It’s typically under 10%. Making infra spend twice aa efficient will only increase ability to spend by 5%, which is equivalent to two years of revenue growth. The growth Ponzi scheme people say that it’s all deferred maintenance and in long term it will collapse, but it simply has not happened anywhere, even in places where suburban development pattern has existed for three quarters of a century.

My impression has been that Strong Towns' analysis of the growth Ponzi scheme was correct, or at least not obviously incorrect, in its original context, which was watching small towns far away from large cities become hollowed out by people moving outside the city limits into unincorporated land. If you actually look at the examples on the original Strong Towns' site, you will see that they're largely not suburbs or even exurbs of major cities.

But both that site and its readers have tried to apply that conclusion to suburbs of major cities, which is ludicrously wrong to anyone that actually knows anything about the causes of municipal bankruptcy (almost always due to pension obligations , and often in a vicious cycle with high taxes raised to pay for pensions that drive away residents).