W.A.G. - The Gormogons

Have you ever been asked how long it would take you do complete a task you’ve never done before? You might have familiarity with the general approach or of some of the steps required, but in general it comes down to a wild ass guess (WAG). In some circles you get a SWAG (Scientific wild ass guess) where you have some parameters, past experience or knowledge that assists in bettering the guess but in the end it’s still a guess. Sure, you could call it an estimate. The real trick is, over time, whether you improve your guesses. Some firms will always estimate low in an attempt to win the work being the least costly. Generally, it fails to cover the resources and/or time required and they end up overrunning or failing to complete. Others estimate way too high and lose out as people get sticker shock. Sometimes, these estimates were closer than people thought based on what was asked for in terms of work required, schedules and other parameters.

So why is any of this interesting to you? Veronique de Rugy has an interesting piece here and here worth reading. The bottom line is that 9 out of every 10 government run programs experience cost overruns and blow out their original estimate. Some key ones to consider:

Medicare – estimated $12B in 1967, $98B in 1990
Capitol Hill Visitor Center – estimated $265M in 2000, $621M in 2007
Kennedy Center Parking Lot – estimated $28M in 1998, $88M in 2003
V-22 Osprey – estimated $4B in 1986, $12.5B in 2006

Entitlement programs fare horribly. Obama and the democrats are touting the CBO’s numbers for forecasting the cost of some of their programs. Keep in mind: “In 2005, for example, CBO projected that Medicare would cost $1.5 trillion in 2050. Two years later, in 2007, the same CBO projected that this cost would reach $2.8 trillion in 2050. And in 2009, it projected that the cost would be $3 trillion instead.”

While we’re not alone – the Syndey Opera House project experienced a 1,400% overrun and the Concorde had a 1,100% overrun – we’re allowing our government officials to sway voters based on clearly erroneous data. Imagine for a moment if you ate your favorite establishment once a week for lunch. Instead of actual prices on the menu, however, they list the estimated price for lunch. You choose a healthy grilled chicken salad for an estimated cost of $10. The bill comes after you’ve finished and the actual cost of your meal is $18….plus tax and tip. Keeping with this illustration, you continue to return to said restaurant and continue to pay the under-estimated cost of your lunches. By the end of the year, you’ve overspent your easting out budget and start wondering what happened. Maybe someone should be asking the various state and federal officials who are looking at the huge (and growing) deficits when will they stop with the under-estimating. Project promoters routinely ignore, hide, or otherwise leave out important project costs and risks in order to make total costs appear lowIt’s easy to say yes to a $10 salad lunch but harder to justify paying $18 for a lunch sized salad. It’s even easier for someone to say yes to getting the same salad free when others pay for it. Think about it. It’s about time that everyone had skin in the game and understood the real costs and viability of these programs, including Medicare, Social Security and other government-run programs.

As a parting shot, when you hear all the sound bites today of the Recovery Act is “working” and has created or saved 2 million jobs. Keep in mind that the super majority of these jobs are government (local, state and federal) that have just added a burden to their hiring agency’s bottom line that wasn’t in their original budget estimate but we’ve just bought them a grilled chicken salad lunch and VP Biden just said, “thanks, and come again.”

GorT

GorT is an eight-foot-tall robot from the 51ˢᵗ Century who routinely time-travels to steal expensive technology from the future and return it to the past for retroinvention. The profits from this pay all the Gormogons’ bills, including subsidizing this website. Some of the products he has introduced from the future include oven mitts, the Guinness widget, Oxy-Clean, and Dr. Pepper. Due to his immense cybernetic brain, GorT is able to produce a post in 0.023 seconds and research it in even less time. Only ’Puter spends less time on research. GorT speaks entirely in zeros and ones, but occasionally throws in a ڭ to annoy the Volgi. He is a massive proponent of science, technology, and energy development, and enjoys nothing more than taking the Czar’s more interesting scientific theories, going into the past, publishing them as his own, and then returning to take credit for them. He is the only Gormogon who is capable of doing math. Possessed of incredible strength, he understands the awesome responsibility that follows and only uses it to hurt people.