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Should US Olympic Training Be Federally Supported?

2012 August 12
by Phil Miller

Here’s a short post about the sacrifices made to make an athlete an Olympian.

Mama, don’t let your babies grow up to be Olympians.

It may not have the ring of the original Willie Nelson/Waylon Jennings song title, but it certainly applies – considering some of the financial back-stories at the London Olympics. Think about U.S. swimmer Ryan Lochte, whose divorced parents are facing the foreclosure of their Florida home. Or U.S. gymnast Gabby Douglas, whose mother filed for bankruptcy earlier this year. One of four children, Douglas all but acknowledged earlier this week how her budding Olympic career took an economic toll. “It was definitely hard on my mom, taking care of me and my siblings,” she told the New York Post.

This has lead, predictably, to this.

Making the situation all the more difficult for U.S. athletes: there’s no direct federal support, as is the case in most other nations. …

Given those horror stories, it’s perhaps no surprise that lawmakers have recently started to talk about tax relief for Olympic athletes – or at least for those athletes who are fortunate enough to win medals. (The honors come with cash prizes awarded by the United States Olympic Committee: $25,000 for gold, $15,000 for silver and $10,000 for bronze.)

I suppose you could make the argument that there is some sort of positive externality argument that can be made in favor of tax support: winning medals in the Olympics leads to national pride, and so on.  But I really wonder how much value, long term external value especially, there is in winning a medal.

Folks of my age remember the decorated swimmer Mark Spitz.  Can you remember how many medals he won and in what Olympics?  No googling for the answer.

OK, if you knew and you are an American, did you feel a welling of national pride?  I didn’t think so.

Sure there are stories that still send shivers up some folks’ spines.  How about the US hockey team beating the Soviets is 1980 and taking the gold?  But those are the exceptions (and there was some unique political back story to that victory).

The US has a vibrant private sports market that leads to a lessening of the national importance of the Olympics and I am far from convinced that Olympic training is something that would be an efficient use of federal tax money.

Mr. Spitz won 7 golds in 1972.

Cross-posted at Market Power

9 Responses
  1. Dan permalink
    August 12, 2012

    I feel sorry for athletes that only get recognition every 4 years but no one is forcing them to go all out for a gold medal. I know families that spend a lot of time and money so their kids can race motorcycles or play soccer and tennis.

    There is no way to know which athletes will have what it takes to win a medal unless we go the Chinese and Soviet Union route and train them from an early age in state supported academies. Yuuch. I’d rather finish below Estonia in the medal count than follow those models.

    Spitz is a good example of an athlete that won big four years after he was supposed to shine in Mexico City. I never felt national pride but marveled at his personal fortitude to stick it out for four years after bombing in 1968. Also how much faster he’d have been without that mustache.

  2. Richard permalink
    August 13, 2012

    Asking the question about national pride among the sample of these readers probably isn’t a good measure of the national sentiment. I suspect NBC might have a better sense (at least NBC has a much bigger monetary stake, and being economists, we should acknowledge how that affects the relative value of each indicator.) NBC thinks that many Americans do take large national pride in those accomplishments. I think we have to start from that premise and then ask the questions about benefits vs. costs, etc.

  3. Rbf permalink
    August 14, 2012

    NO NO NO . The tax dollar is going to way to many places the way it is.If you want to be in the
    Olympic, pay for it, don’t think some one else is going to pay for it. Look how much money the people that won are going to make.

  4. Doug M permalink
    August 14, 2012

    We do subsidize our olympians via the USOC. They pay for training, facitlities and equipment. Does it make a difference that corporate sponsorships and individual donations provide the bulk of their funding vs. government subsidies. Far more democratic this way.

    I find the cash for medals distasteful. The medalist should be able to turn thier acheivments into a monitary return. Let the USOC keep their money, and use it to train the next generation.

  5. Owen permalink
    August 15, 2012

    While I don’t support further tax subsidies and government support for the USOC or any of the NGB of the various olympic sports, I do think it is silly to actually tax our medalists. The tax results from the USOC awarding winnings, so isn’t that an economic insentive to finish 4th at the Olympics? You would still be one of the best in the world, possibly hold world records, but now you don’t need to pay a tax.

  6. Ken D. permalink
    August 18, 2012

    Giddiness about the “vibrant private sports market” should be tempered by the recollection that Mark Spitz and most of the stars of the 1980 hockey team developed their skills while enjoying full ride scholarships to public universities.

  7. Upright permalink
    August 18, 2012

    Maybe a country like Venezuela or Ecuador should do more for their Olympic athletes, but the US, with its machismo culture, malignant individualism and disrespect for the poor and ignorant needs to spend more tax money on health and education, nothing for Olympic subsidies. No doubt some decent people hurt their future prospects by devoting zillions of hours to athletic training rather than studies, but increased federal subsidies would only increase the number of people ending up in this mess.

    The irony is that we Americans profess to be Christians while belittling those among us who are less fortunate. Sweden didn’t seem very Christian to me when I visited, but they have held the cost of nationally subsidized healthcare to 9% of GDP for more than 25 years now- they treat the elderly well, they have been able to control overtreatment and overuse of fancy technology and give much better retirement security than we do. We talk about Christianity, Swedes live it although they might be offended at such remarks.

  8. Pete G permalink
    August 18, 2012

    http://econpapers.repec.org/paper/aplwpaper/11-20.htm

    In Canada civic pride matters.

  9. Steve permalink
    August 24, 2012

    You could argue that National pride comes not from the sum of utilities gained by the nation of any individual medal, any of which could be substituted for another of the same color, but rather from the aggregate table of medals.

    It is easy for the USA to say “no, there is no value” to funding and question its marginal utility since the USA still tops the aggregate medals table. There is no need for funding. The question for those not at the top is how much is an additional “place” on the table worth in welfare? If the USA were 2rd on the medal table behind China, America would no longer be the Olympics super power. Symbol of a crumbling empire? You bet. If America were 2rd, how much would you pay individually, Mr. Reader, to “buy” that place on the table to put America at the top reassured of Americas place in the scheme of things? $1? That would surely be a dollar extremely well spent for the utility you would get, right? I mean rather than spending that dollar on some other consumable.

    I will guarentee the case for sports funding will strengthen after the next Olympics when China tops the table.

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