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Senior
Joined: 31 Jan 2010
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 Posted: Tue Mar 30, 2010 10:08 pm Post subject: Shock as Olympics comes in over budget. |
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http://news.bbc.co.uk/2/hi/uk_news/england/london/8595881.stm
In unbelievable news today, it seems that the construction and planning of the 2012 London Olympics has over run its cost estimates!
How is this possible? Don't govt initiatives always meet or come in under the forecasted cost? |
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pkang0202
Joined: 09 Mar 2007
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| Posted: Tue Mar 30, 2010 10:27 pm Post subject: Re: Shock as Olympics comes in over budget. |
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| Senior wrote: |
How is this possible? Don't govt initiatives always meet or come in under the forecasted cost? |
I don't know, why not ask US Democrats with their expertise on Health Care cost estimates. |
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Senior
Joined: 31 Jan 2010
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| Posted: Tue Mar 30, 2010 11:56 pm Post subject: Re: Shock as Olympics comes in over budget. |
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| pkang0202 wrote: |
| Senior wrote: |
How is this possible? Don't govt initiatives always meet or come in under the forecasted cost? |
I don't know, why not ask US Democrats with their expertise on Health Care cost estimates. |
Haha, boo-ya!
That was the exact veiled reference I was making. |
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visitorq
Joined: 11 Jan 2008
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| Posted: Wed Mar 31, 2010 3:43 am Post subject: |
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The rule of thumb seems to be whatever "estimate" the government quotes, triple it (at least). Didn't the recent Olympics in Vancouver go around 6 times over the original budget? The government is partly negligent, but mainly they know full well that it's going to cost way more than what they say (not that they mind wasting taxpayer money in the least), they just lie and announce the budget overruns incrementally to keep the public from getting as angry. (ie. if you've already spent $15 billion, another 5 doesn't seem so bad. And if you've already spent $20 billion, you may as well spend that extra 8. etc. etc).
Unless it's a banker bailout, that is. Then you just write a blank check. |
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Senior
Joined: 31 Jan 2010
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| Posted: Wed Mar 31, 2010 3:46 am Post subject: |
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| visitorq wrote: |
The rule of thumb seems to be whatever "estimate" the government quotes, triple it (at least). Didn't the recent Olympics in Vancouver go around 6 times over the original budget? The government is partly negligent, but mainly they know full well that it's going to cost way more than what they say (not that they mind wasting taxpayer money in the least), they just lie and announce the budget overruns incrementally to keep the public from getting as angry. (ie. if you've already spent $15 billion, another 5 doesn't seem so bad. And if you've already spent $20 billion, you may as well spend that extra 8. etc. etc).
Unless it's a banker bailout, that is. Then you just write a blank check. |
It's the old sunk cost fallacy. If you've already thrown 15 billion down the well, doesn't it make sense to chase the "investment" with another 5? |
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chellovek
Joined: 29 Feb 2008
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| Posted: Wed Mar 31, 2010 5:41 pm Post subject: |
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| Bah, private contractors ripping off the public purse. Problem is the gov't have a record of letting them get away with it. |
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Senior
Joined: 31 Jan 2010
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| Posted: Wed Mar 31, 2010 5:49 pm Post subject: |
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| chellovek wrote: |
| Bah, private contractors ripping off the public purse. Problem is the gov't have a record of letting them get away with it. |
Yea, that must be it.
Maybe it's got more to do with the fact that you are more free and less careful with other people's money. If the organisers had a personal stake in the budget, they would be more careful, but they know that if they go over budget there is always more cash on the way. And there is no penalty for going over budget.
Extrapolate that to all the areas where govt involves itself (cough, health care), and you get one giant clusterflock of Olympic proportions. |
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chellovek
Joined: 29 Feb 2008
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| Posted: Wed Mar 31, 2010 6:02 pm Post subject: |
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Ach there are books and whatnot about this type of thing vis-a-vis New Labour and private contractors. Indeed, part of the critique is that Civil Servants are ill-trained to oversee the private contractors and as such are prone to nodding through funding increases for projects even when rather spurious. Less scrupulous private contractors, knowing this, take advantage.
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I confess I left the latter part of the critique out in my first post because I enjoy baiting free-market/libertarian types from time to time 
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In all seriousness though, yeah it is a disgrace how badly overbudget London 2012 has become. I mean, Tessa Jowell as Olympics Minister? C'mon. |
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Senior
Joined: 31 Jan 2010
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Wed Mar 31, 2010 6:53 pm Post subject: |
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| Senior wrote: |
http://reason.com/blog/2010/03/31/reasontv-3-reasons-why-public
This is very interesting. |
Yeah, the public unions are bankrupting the states and some provinces (Ont.). They're being very aggressive in not renegotiating contracts too. |
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Senior
Joined: 31 Jan 2010
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| Posted: Wed Mar 31, 2010 7:02 pm Post subject: |
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| mises wrote: |
| Senior wrote: |
http://reason.com/blog/2010/03/31/reasontv-3-reasons-why-public
This is very interesting. |
Yeah, the public unions are bankrupting the states and some provinces (Ont.). They're being very aggressive in not renegotiating contracts too. |
Luckily in NZ we have a very weak public workers union. They are very vocal but are pretty much a national laughing stock. The Teachers' union, on the other hand, is an insidious vulture that is currently vehemently opposing changes to the method of administering standards and evaluations for teachers. |
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Fox
Joined: 04 Mar 2009
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| Posted: Wed Mar 31, 2010 7:16 pm Post subject: |
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| When voters start holding their representatives accountable for this kind of fiscal misjudgment, it will stop happening. If on the other hand voters shrug apathetically when projects run over-budget, why should their representatives care? Where's the incentive? If the individuals in charge of this get the prestige of having brought the Olympics to their town (I don't know why that's prestigious, but it evidently is), and don't get voted out of office due to the enormous cost they paid to do so, they came out winners by any personal standard, so they'll keep doing it. |
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bucheon bum
Joined: 16 Jan 2003
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| Posted: Fri Apr 02, 2010 9:55 am Post subject: |
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| Fox wrote: |
| When voters start holding their representatives accountable for this kind of fiscal misjudgment, it will stop happening. If on the other hand voters shrug apathetically when projects run over-budget, why should their representatives care? Where's the incentive? If the individuals in charge of this get the prestige of having brought the Olympics to their town (I don't know why that's prestigious, but it evidently is), and don't get voted out of office due to the enormous cost they paid to do so, they came out winners by any personal standard, so they'll keep doing it. |
Indeed. All about incentives. |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Fri Apr 02, 2010 8:02 pm Post subject: |
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| Quote: |
| The �9.325bn budget for the Olympics is triple the original estimate for the project. |
http://news.bbc.co.uk/2/hi/uk_news/england/london/8595881.stm
Triple is a good rule of thumb for government claims.
| Quote: |
| When voters start holding their representatives accountable for this kind of fiscal misjudgment, it will stop happening. |
You want to know why this won't happen?
http://www.salon.com/news/opinion/glenn_greenwald/2010/03/31/journalism/index.html
The government has invaded two countries, tortured innocent people to death, wages a war on a plant, has millions of prisoners, is illegally spying on the people and the rest. But if you turn on any of the TV networks or read any of the major daily papers there is PERFECT message symmetry. The government has blood dripping down its mouth and yet the political center in the US is being whipped into a frenzy about a mystical radical right wing that is blah blah. Perfect message symmetry. Rather than discussing and presenting real actual meaningful news for the public to consider and digest the government provides a topic (arresting a militia drenched in FBI moles) and the faux FOX-MSNBC R vs. D discussion starts. Attention redirected to a topic more useful for the immediate needs of the administration. Like when Bush/Cheney would raise the "terror alert" whenever it found itself in political trouble (all the time).
It's a big scam. Same everywhere. There is 1) the establishment/elite and 2) everybody else. "2" keep voting for "1" because "1" controls all the information that "2" bases their vote on.
Cynical? Yes. Also correct. |
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bacasper
Joined: 26 Mar 2007
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| Posted: Fri Apr 02, 2010 9:19 pm Post subject: |
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| mises wrote: |
The government has invaded two countries, tortured innocent people to death, wages a war on a plant, has millions of prisoners, is illegally spying on the people and the rest. But if you turn on any of the TV networks or read any of the major daily papers there is PERFECT message symmetry. The government has blood dripping down its mouth and yet the political center in the US is being whipped into a frenzy about a mystical radical right wing that is blah blah. Perfect message symmetry. Rather than discussing and presenting real actual meaningful news for the public to consider and digest the government provides a topic (arresting a militia drenched in FBI moles) and the faux FOX-MSNBC R vs. D discussion starts. Attention redirected to a topic more useful for the immediate needs of the administration. Like when Bush/Cheney would raise the "terror alert" whenever it found itself in political trouble (all the time).
It's a big scam. Same everywhere. There is 1) the establishment/elite and 2) everybody else. "2" keep voting for "1" because "1" controls all the information that "2" bases their vote on.
Cynical? Yes. Also correct. |
Excellent thumbnail sketch of the overarching problem.
I can see getting fooled once or twice, maybe even three times, but year after year after year, and election after election after election? What are people thinking? Obviously, they are not. Must they really get to the point where their ass is thrown out of their homes and they are living on the streets or something equally drastic?? |
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