And this cartoon on business taxation is very appropriate after yesterday’s post about a potential corporate tax rate reduction from the Obama Administration.
Many of us know that Obamacare will be very expensive and that supporters, aided and abetted by the Congressional Budget Office, deliberately low-balled the cost estimates.
I’ve also cited my Cato colleague Chris Edwards, who has made a more comprehensive (and well-documented) claim that government officials systematically lie about the cost of new projects.
Now we have a rather remarkable example of this fiscal prevarication from across the ocean.
In 2002, the British government estimated the cost of hosting the Olympic Games at $2.8 billion. Ten years later, the price has passed $15 billion and is still rising. When everything is added up — lost business, as many as 13,500 British soldiers patrolling the streets of London (more than are in Afghanistan) — the expenses may come to $38 billion.
Wow, cost overruns of somewhere between 500 percent and 1300 percent. That’s bad, even by government standards.
Though I imagine that moronic advocates of Keynesian economics will argue that the $15 billion-$38 billion is a form of stimulus that will percolate through the economy – conveniently forgetting that the money had to be taxed and borrowed from the private economy in the first place.
P.S. The top cartoon in this post is a good description of how government officials come up with their fiscal estimates.