As my Cato colleague Chris Edwards has documented, government programs and contracts inevitably cost much more than first projected. This pattern of inaccuracy exists for several reasons, including the fact politicians have an incentive to lowball cost figures. But a big reason for the mistaken numbers is that government budget estimators do not understand the degree to which people will alter their behavior to get their hands on other people’s money. I explained recently on Fox Business network that this means any government-run health care scheme will be much more expensive than we are being told today.
Our friends at Reason TV address this issue in a very compelling three-minute video that looks at how government programs – especially for health care – have cost several times more than politicians claimed when the legislation was first adopted.