Why Government Budgets Inflate for Big Projects

Governments around the world routinely underestimate the cost of major infrastructure projects. In this episode of Government Spending with Fexingo, Lucas and Luna explore a specific case: the California High-Speed Rail project, originally estimated at $33 billion in 2008 and now projected to cost over $100 billion. They break down the psychological and institutional forces behind 'optimism bias'—where planners anchor on best-case scenarios and ignore historical data. Lucas explains the 'reference class forecasting' method proposed by Nobel laureate Daniel Kahneman and how it could prevent billions in waste. Luna challenges whether political incentives will ever allow honest budgeting. The episode offers a concrete lens on why your tax dollars keep disappearing into cost overruns and what, if anything, can be done about it. #CaliforniaHighSpeedRail #CostOverrun #OptimismBias #GovernmentBudgeting #InfrastructureSpending #DanielKahneman #ReferenceClassForecasting #PublicFinance #TaxWaste #ProjectManagement #Economics #GovernmentSpendingWithFexingo #BudgetFailures #MegaProjects #CognitiveBias #FexingoBusiness #BusinessPodcast #EconomicsExplained Keep every episode free: buymeacoffee.com/fexingo