The 2008 Olympics in Beijing is the current king of cost overruns: It was supposed to cost a mere $1.6 billion – but the Chinese ended up shelling out a staggering $40 billion for what turned into a lavish propaganda extravaganza, according to economist Brad Humphreys at the University of Alberta, an expert on the economics of sports. The 2004 Olympics in Athens was also expected to cost $1.6 billion, and ended up costing ten times that, contributing to Greece’s current debt crisis. Meanwhile, many of the sports facilities built for the Athens Games are underused and already falling apart.
London isn’t expected to go quite so far over budget, but its Olympics are turning out to be a lot pricier than the frugal $5 billion affair the government originally promised. And the Brits are already feeling more than a little defensive about the cost overruns. When Public Accounts Committee chair Margaret Hodge reported in March that the event was likely to end up costing closer to $17 billion, she found herself pilloried in the press.
But Hodge is hardly the only one worried about London’s Olympicnomics. In May, Moody’s issued a report suggesting that London’s Olympics boom may come to an end not long after the event’s closing ceremonies. “Overall, we think that the Olympics are unlikely to provide a substantial boost to the UK economy and believe that the impact of infrastructure developments on UK GDP has probably already been felt,” a Moody’s official said in a statement.
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