That £41bn Olympic Boost in Full

It took a little time, but I finally got to the point of finding the independent report for the DCMS by Grant Thornton (independent as in, funded by the DCMS). The summary is more than enough to tell you how they worked it out:

Underpinning these impacts is the boost to demand from the £8.9 billion Public Sector Funding Package and the additional £2 billion of privately financed spending by the London Organising Committee of the Olympic and Paralympic Games(LOCOG).

The construction of the Olympic Park in particular provided a major stimulus to the construction sector at a time when it had been hard hit by the recession. The 'administrative and support'sector also derived substantial benefits but all sectors derived some benefit, with ‘manufacturing’seeing significant supply chain impacts.

Developments in East London such as Westfield that have been catalysed by the Olympic Park development have generated further benefits for the local area.

and

These estimates take account of the spread of impacts down the supply chain and the resulting generation of economic activity through consumer expenditure

At the heart of this is a fallacy, that spending, in itself is a benefit, because it creates jobs. Bastiat was complaining about this sort of talk 250 years ago, but the people at DCMS have cooked the books still further by talking about how money moves on.

So, a bloke building a stadium isn't just the beneficiary. It's also the supermarket that he shops at, the bloke who repairs his car, the cinema where he goes to the pictures. But of course, none of these people holds the money. They are simply transferring money on. By the way the DCMS is thinking, if I gave Mark Wadsworth £10 and he gave me £10 back, I'd have created £20 of economic benefits. And yes, that's clearly weapons grade bullshit.