Water seeps through the asphalt, and into the dirt underneath. This makes the now wet dirt compress a bit, leaving a hole beneath the asphalt. When enough cars drive over the road, asphalt above gets pushed down and crushed into the hole. Governments could mostly avoid this by making super thick and sturdy roads that almost never fail (see Germany), but most have decided that it’s not worth the extra money and it’s easier to just patch up potholes when they appear (a founding principle of the state of New Jersey).
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