Todd J. Zywicki, Professor of Law at George Mason University and a Senior Scholar at the Mercatus Center at George Mason University, submitted for the record, written testimony on the possible impacts of the proposed modifications to mortgages in Bankruptcy Code.

The fundamental idea of this paper is that government is not and cannot be the source of successful clustering. While clustering is valuable to the economy, governments do not have access to the knowledge that would enable them to promote the successful development of clusters. We view this epistemic problem bureaucrats face as insurmountable; if anything, it puts a clear limit on the capacity of government to create clusters.

Fear of a deep recession has led policy makers to propose an unprecedented stimulus package to save the economy, a sort of Main Street economic recovery package that would rely heavily on government-sponsored infrastructure projects to create jobs and stimulate economic activity.

The problem is real. If history is any guide, however, the bailout the government proposes won’t work.

This Policy Primer provides basic background information on the history, legal framework, and past successes of BIDs, information that local governments interested in promoting BIDs within their jurisdictions might find useful. It further proposes alternative ways urban governments could give BIDs enhanced roles in local governance.