Why Government Infrastructure Spending Is Always Over Budget

Lucas and Luna dig into a paradox that defines public finance: major infrastructure projects almost always go over budget, and the overruns follow a predictable pattern. They use the 2024 California high-speed rail update and the Big Dig in Boston as case studies to explain why cost estimates are systematically low. The hosts explore the 'optimism bias' and 'strategic misrepresentation' in government budgeting, and why private-sector discipline doesn't easily transfer to public works. The episode also touches on how risk allocation, political timelines, and procurement structures drive cost growth. By the end, listeners understand why a planned $10 billion bridge routinely becomes a $15 billion bridge, and why that is not usually fraud, but a feature of how democracies fund large projects. #InfrastructureSpending #GovernmentBudget #PublicFinance #CostOverruns #CaliforniaHighSpeedRail #BigDig #OptimismBias #StrategicMisrepresentation #Megaprojects #Procurement #Economics #FexingoBusiness #BusinessPodcast #LucasAndLuna #BudgetBaseline #RiskAllocation #TransportationPolicy #PublicWorks Keep every episode free: buymeacoffee.com/fexingo