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  • The Sports Stadium Lesson: Government Spending Doesn't Stimulate

    In 1999 taxpayers were billed $393 Million to build Safeco Field, the home park for the Seattle Mariners.

    As baseball season rapidly approaches, we are reminded that between 1990 and today 18 cities have put up government money to help build new stadiums for their baseball teams. All of these government expenditures were justified on the exact same theory that the stimulus bill was: that government spending creates a multiplier effect that makes the taxpayer investment worth it. That tactic clicks every time, just as it did with the stimulus bill.

    But there’s no evidence that using public money to build stadiums is a sensible economic strategy. A 2006 survey of Ph.D. economists in the American Economic Association reports that 85 percent agree that government subsidies to professional sports franchises ought to be eliminated. One critic spoke for hundreds:

    I have been studying and writing about publicly financed stadiums for more than 10 years and cannot name a single stadium project that has delivered on its original grandiose economic promises, although they do bring benefits to team owners, sports leagues and sometimes players.

    The reason why was explained over a century ago by Frederic Bastiat in his famous essay “What Is Seen and What Is Not Seen”: the money that is taxed away to build the stadium would have been spent in some other way. The same is true of the money that consumers spend at the game. Publicly-funded stadiums inefficiently transfer spending from one place to another: they don’t increase the total amount of spending.

    The new Yankee Stadium has cost about $1.6 billion. Even at the headline price, the stimulus bill would buy 500 Yankee Stadiums. But ‘build it and they will come’ makes as little sense nationally as it does locally: it’s just the same error on a bigger scale, with a wider range of projects that create more perverse incentives. Hope’s great in baseball, but in stadiums and stimulus bills, it represents a triumph over experience.

    Posted in Ongoing Priorities [slideshow_deploy]

    5 Responses to The Sports Stadium Lesson: Government Spending Doesn't Stimulate

    1. Ozzy6900, CT (avid b says:

      Cities were using "found money" to erect these sports complexes and many of these Cities are now facing economic problems along with their States! In almost all of the cases, these Cities spent money on sports while complaining that their Food Pantries were dwindling, their poor were hungry and their homeless rate was growing. Just like the Federal Government, Local Governments are no better at controlling their budgets and will throw money away on idiotic concepts. Baseball, for example, can deal with it's own parks. The clubs have more than enough money to work with and if they don't – no new park! Sounds simple enough, doesn't it?

    2. Pingback: DelawarePolitics.net - Delaware's Center Right Voice

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    4. David, Oklahoma says:

      Almost all leaders in Oklahoma, including Brandon Dutcher of the OCPA, either remained silent or were leading the band wagon for the 120 million in new taxes and breaks to renovate a practically new stadium in OKC because the richest men in the state wanted to make more money for their basketball team. Hypocrisy runs deep on this issue for many Republicans.

    5. Pingback: Red Stater still wrong

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