Let's say all that. What do you do?
Did you say, "Why, build the world's most expensive sports stadium?"
If you did, you're a winner-- probably the only one in this sad tale.
Las Vegas made what is being called "the worst stadium deal" ever to lure the Oakland Raiders to Sin City. The stadium is reportedly projected to cost $1.9 billion. Billion. With a B.
While come of that money is coming from rich people who have presumably run out of ways to waste money and the Bank of America, who have-- well, I can't figure out what's in it for them. But the city itself is kicking in $750 million. $750 million. Some or most of that will come from an increased hotel tax applied to a new influx of almost half a million new tourists who will presumably be flocking to Las Vegas to see the
And if the imaginary tourists don't swell the tax coffers, who else is dipping out of that pool of money? Who else might get squeezed aside? Who, did you say? Yes-- the schools.
Opportunity cost is a way to look at an expenditure. You see a scarf and it looks so cool and it's only ten bucks, so it's a great deal. But the opportunity cost angle is to ask, "Well, what else could I do with the ten bucks if I didn't spend it on a scarf?" If the answers are things like "Food for my children" or "Outstanding parking fines," you should probably pass on the scarf. At the very least, buying the scarf will make a statement about what you really value.
So, if we look around Las Vegas, what's our opportunity cost. Is there something else that we could do with $750 million? Anything? Anything at all?
Perhaps the stadium will benefit some other teams. But the actual research on stadiums done by actual economists (working, for a change, in their actual area of expertise) is that stadiums are not investments:
Academic studies consistently find no discernible positive relationship between sports facility construction and local economic development, income growth, or job creation.
Las Vegas has decided to put both its money and its mouth somewhere other than its schools. Mississippi has a chance to stay out of the very lowest part of the US education basement only because Nevada is intent on going down to the basement and digging a hole.