It's time to make the Olympics not only profit making but also interesting. Every four years the Olympics rolls into some poor naïve city and proceeds to prove to all and sundry that it wasn't worth the time, the effort, or the money that was spent on it.
With London 2012 expected to be enormously over-budget, I would suggest implementing the following plan - not just to save money, but to also put some life back into the Olympics. Post 2008, regional qualifying should take place over three years, reducing the field of competing athletes to a cream of the region. Then, when the Olympics come around, the events are simply a series of finals with no one but champions competing in them. Perhaps the Olympics could be reduced to a three-day event. Infrastructure would then be dispersed around the World and costs shared, and the event itself would be short and sweet.
The amount of taxpayer's money that is going to be wasted upon on the upcoming London Olympics is not even known by the current administration. The honesty of their continual claims that it will not be over budget is hard to believe, but they could insure themselves against dramatic loses by seeking to have the cost of the games shared across the globe! The Olympic Committee will continue to seek others to pay for their games and, unfortunately, many cities/governments will continue to force their taxpayers to pay.
It has to be remembered that governments are vain, and there is nothing better than an Olympics to rub the egos of those in power.
[Ed - I also like Sir Simon Jenkins' rather more modest proposal: that we deliver the Olympic games at the originally agreed cost and not a penny more. If that means we have to use existing stadiums and venues, well, so much the better!]