426 THE AMERICAN ECONOMIC REVIEW 8.Conclusion-The Financial Problems of the Large City The story is perhaps completed if we add to the preceding observa tions the fact that each city is in competition with others and with its own surrounding areas for industry and for people with the wherewithal to pay taxes.No city government acting alone can afford to raise its tax rates indefinitely.Even if they were politically feasible,mounting tax rates must eventually produce diminishing and perhaps even negative ret rns as they de ss the tax ba e furthe We can now qul kly pull t of our story tog ether.We have just seen that our municipalities are perhaps unavoidably subject to a variety of growing financial pressures:the limited sources of tax funds, the pressures imposed by several processes of cumulative decay,the costs of externalities which seem to have a built-in tendency to rise more rapidly than the population.These phenomena imply that the activities of the will have to be expanded if standards of city life o be emaintained.But the ailable for the rpos e are imit And over this hangs th e s ow cast by our model ur balanced growth which has shown that the costs of even a constant level of activity on the part of a municipal government can be expected to grow constantly higher. The picture that has been painted is bleak.It suggests strongly that serwayouoourcitieAll of thiswould then ap oear to 任er r the oretical support for the Heller-Pechman proposal tha provide the res arces necess ry to pre crisis that thr tens our larger urba n communities an whos effects on the quality of life in our society may become one of the na- tion's most serious economic problems. ReFereNces 1.W.J.BAUsron AND W.G.BowEN,Performing Arts:The Economic Dilemma.New York】 1966. 子Ao ealh.Glencoe,Ill.,1960. hat Price Economic Progress?"Yale Review,Autumn 1959,95110. f does not be al of the osts of his s action ation today P that obtainable fror trans .If relat ices do inal n be what might be called Pareto-no town area in order to make possible a faster,more efficient public transportation system. ht c 2001 All Rig