Million-Dollar Pothole

The Million-Dollar Pothole happens when people fail to consider the counterfactual. While the numbers are often different, a million-dollar pothole story usually goes like this.

Every year, this town spends $1 million filling in potholes. Yet, the annual survey reveals that there is only one pothole in the town. How can it cost a million dollars to try to fill a single pothole every year?

The logical fallacy here, of course, is that potholes arrive in the town at some rate, and in this particular case potholes are disappeared at that rate so that the steady state is an extra unfilled pothole.

Of course, this being a fallacy doesn't mean that pothole-filling is efficient or inefficient. It just means that the arithmetic is incorrect. It does not, in fact, cost a million dollars to fail to fill that one pothole every year.

While this is a very obvious example, the typical ones usually use different numbers. For example, the following Reddit comment:

A Reddit user shows us how it's done

Far be it from me to claim that SF's homeless budget is well-spent. However, during the pandemic, I happened to once deliver food for some homelessness NGO and much of it went to families in low-income housing in the Mission who seemed to rely on this as a critical source of sustenance. Some amount of the money from SF's homelessness budget is finding its way to these people, so surely that denominator is incorrect there. These people are not homeless because they are being spent on. And we're going to have to spend on them every year.