On Monday, Jon Sanders gave an enlightening talk about the folly of “the multiplier” — the notion that when government “injects” money into the economy through spending on projects such as stadiums (and conference centers, light rail, and other things that fire the imaginations of central planning types), it “multiplies” as the money is spent. The error, as Jon pointed out, is that this notion overlooks the opportunity costs of taking money and resources away from other uses in order to build whatever it is that politicians and their allies want.
Today’s Freeman piece by Michael Nolan about the mania for “investing” in sports stadiums underscores Jon’s arguments.
