Hosting the Olympics is a great idea and an even bigger honor, right? Well research suggests that this is not the case.
Once thought of as a great opportunity for long term economic growth, it is now considered the great lie of hosting the Olympics. With the winning city having to build new infrastructure and reconfigure land in order to host one of the biggest collections of sports on earth, the cost of hosting this great event often outweighs the profit that the Olympics produce.
The bidding for the 2022 Winter Olympics is currently ongoing. Cities that were thought to be in the running are dropping out at a rapid rate after officials in those cities are realizing the same things that the research has been suggesting. Krakow, Munich, and Davos/St. Moritz all withdrew their bids after the public voted against hosting. Other cities are very close to pulling out of the running because of the public resisting the idea of bringing the Olympics (and everything that goes with it) to their own backyard.
Holy Cross economics professor Victor Matheson took this idea to task:
"Public expenditures on sports infrastructure and event operations necessarily entail reductions in other government services, an expansion of government borrowing, or an increase in taxation, all of which produce a drag on the local economy. At best public expenditures on sports-related construction or operation have zero net impact on the economy as the employment benefits of the project are matched by employment losses associated with higher taxes or spending cuts elsewhere in the system."
Basically the research is suggesting that in the best case scenario, the city that is hosting the Olympics will break even when all the costs and profits are weighed together. The Host city for the 2022 Olympics will be voted on July 31st, 2015 with the only two remaining bidders for the "honor" of hosting being Almaty, Kazakhstan and Beijing, China.
This trend may become the norm if the finances of hosting this gigantic accumulation of sports cannot be figured out.
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