>A better solution, IMHO, is to borrow an idea from the EPCOT[1] Concept that Walt Disney created...
Thanks for the link; I'll have to check that out further. I think I've run across documentaries for cities that have similar ideas. I think new development planning should definitely take some of these ideas into account, but we also have to think about what we can do on the margin to ensure the livability of our cities.
>> that doesn't mean that all streets should be maximally employed to reduce that congestion.
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>It does, actually, because all streets are connected and part of the same network...
Maybe I'm misrepresenting what you are saying, but generally I would think that you don't want maximal utilization of all the paths in a network. If there's a shock to the system (say a major artery is closed down due to some chemical spill) then you want alternate pathways to be available to absorb the unexpected load. Using suburban through-ways in such a case is fine. Having significant amounts of regular traffic going through them is not. Systems need slack and redundancy to be resilient.
Now, will non-residents still use residential through-ways to commute? Indeed, that is fine and can't be totally prevented anyway. But hopefully incentivizing people to use major arteries will apply pressure to improve public transit options (in order to make those arteries more efficient) and will help keep residential streets safer for pedestrians, bicyclists, etc.
edit: fixed formatting