Saturday, February 21, 2009

Transforming the Economy Sustainably

If we add $1 trillion to existing government spending, and allocate the existing spending in a way that stimulates, how much will the economy grow over time, and how sustainably?

While that is the question of the hour, all the kings horses and all the kings men have no answer.

That is tragic because the answer is blowin' in the wind.

Using complexity and actuarial science tools to supplement existing models, alternative ways of stimulating the economy could be tested before implementation. The ones most likely to succeed could be implemented and monitored and adjusted over time as needed.

That way, tables could be developed showing multiples of alternative allocations. One allocation might double GNP growth over five years while another might produce a 500% increase over three years.

Wouldn't it be refreshing to hear, "We have decided to add $1 trillion to existing spending for the purpose of transforming our tired economy. We have tested alternative approaches and decided on one which has a 95% chance of doubling GNP within three years. We will monitor the money and if it is not having the desired effect, will make adjustments.

We are confident this stimulus will transform our economy because we have tested it from the macro to the micro level. The money is targeted to industries and companies most likely to provide sustainable, transformative growth.

Our models are actuarially sound, demographically robust, temporally adjusted, interactively designed, and probability oriented. The money flow will be transparent and accounted for professionally."

Yes we can.

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