For months I have been trying to build a metaphysic 14o characters at a time.
How do we synthesize Platonic Forms, Quantum Science, Fractal Geometry, Complex Emergence, Actuarial Science, String Theory, Healthcare Reform, Econometrics, CAPM, Hilbert Space and Schrodinger Waves 140 characters at a time?
Go to twitter.com, philosophize and see.
Showing posts with label Los Alamos. Show all posts
Showing posts with label Los Alamos. Show all posts
Friday, August 28, 2009
Monday, May 11, 2009
Thursday, March 19, 2009
The AIG Debacle
Rome is burning and our leaders are stumbling over each other about $150 million in bonuses. These are the same politicians who have quadrupled the federal deficit since 1980. Reagan and the two Bushes produced three times more deficit than all prior President's (yes going back to George Washington).
$150m million is 1/10% of $150 billion. Politicians no longer even read briefs on $150 billion in spending. Does anyone believe they really care about AIG's bonuses?
$150m million is 1/10% of $150 billion. Politicians no longer even read briefs on $150 billion in spending. Does anyone believe they really care about AIG's bonuses?
Tuesday, March 17, 2009
The $70 trillion question
What do you get when you have a $5 trillion spending agenda and a $65 trillion entitlement deficit?
The need for a very targeted stimulus. Basically, the $5 trillion has to revitalize the economy adequatey to pay off the $65 trillion entitlement deficit.
Oh, and maybe we should pay down some of the $10 trillion recently run up in Federal deficits. Then we can go to work on state and local unfunded debt.
Anyway it is clear the Stimulus has a lot of work to do. The models being used now to estimate impact have proven inadequate for decades. Only by incorporating advances from actuarial and complexity science will they have a chance of adequately targeting expentures to maximixze the multiplier effect over time.
Lee
The need for a very targeted stimulus. Basically, the $5 trillion has to revitalize the economy adequatey to pay off the $65 trillion entitlement deficit.
Oh, and maybe we should pay down some of the $10 trillion recently run up in Federal deficits. Then we can go to work on state and local unfunded debt.
Anyway it is clear the Stimulus has a lot of work to do. The models being used now to estimate impact have proven inadequate for decades. Only by incorporating advances from actuarial and complexity science will they have a chance of adequately targeting expentures to maximixze the multiplier effect over time.
Lee
Thursday, March 12, 2009
Holistic Stimulus
It all should be done at once.
The idea of stimulus spending is to stimulate economic growth. Does anyone believe that will happen if we just dump money into exisitng systems which are failing?
That's why the President wisely wants to reform healthcare, education, lobbying, earmarks, and other dimensions of spending simultaneously with stimuli and bailouts.
When 5% of $ 1 trillion goes to "healthcare", it can have $0 effect, $50 billion effect, or $500 billion effect. It all depends on the microfoundations.
Similarly with infrastructure, energy, science and welfare. When we talk about $4 trillion in total spending, how it flows will make the difference between nirvana and doomsday. We could end up with a collapsed, unsustainable economy or a vibrant, sustainable one.
The choice is ours.
Are we willing to invest in models which will show how flows can best be directed to produce a sustainable economy?
Yes we are.
Lee
The idea of stimulus spending is to stimulate economic growth. Does anyone believe that will happen if we just dump money into exisitng systems which are failing?
That's why the President wisely wants to reform healthcare, education, lobbying, earmarks, and other dimensions of spending simultaneously with stimuli and bailouts.
When 5% of $ 1 trillion goes to "healthcare", it can have $0 effect, $50 billion effect, or $500 billion effect. It all depends on the microfoundations.
Similarly with infrastructure, energy, science and welfare. When we talk about $4 trillion in total spending, how it flows will make the difference between nirvana and doomsday. We could end up with a collapsed, unsustainable economy or a vibrant, sustainable one.
The choice is ours.
Are we willing to invest in models which will show how flows can best be directed to produce a sustainable economy?
Yes we are.
Lee
Monday, February 16, 2009
$787 billion
A billion here...
Now the details of the stimulus package are out. Will it work? Has it been tested?Does anyone know?
Complicated economic/mathematical models have been run. But aren't they the ones which got us here?
Do they account for black swans? tipping points? cascades? power laws? multifractals? fat tails?cluster correlations? phase transitions? interactions? demographics? uncertainties? time frames?
The fact is that there are data mining, agent based, actuarially sound, data visualization, econometric tools available by which to truly test and monitor any stimulus scenario developed. The anticipated impact on the global and US economies as well as the individual sectors and businesses could be forecast. The options most likely to have the sustainable, transformative effect desired could be chosen and monitored and adjusted as needed.
How much more confidence would be inspired if officials could testify..."We anticipate (based on the best data and analysis availble) that this stimulus package will have an impact on GNP of $500 billlion in the first year with a 92% probability it will be at least $400 billion...the multipliers associated with the chosen components of the package are the largest of all those tested..."
Here are the details of the ($787 b) stimulus package passed this weekend:
$506 billion in spending
-$141b healthcare
-$92 b infrastructure
-$87b education
-$67b welfare
-$41b energy
-$10b housing
-$6b science
-$7b security
-$55b other
$281 billion tax credits
This money could be targeted and monitored at the micro level to have maximum impact. For example, the science money could to where it would have a multiplier of 22 or 1.
From the labs of Los Alamos to the campuses of Boston, the tools needed to assure that the stimulus works have already been developed. All we need to do is integrate them with those currently being used.
Yes we can
Lee
Now the details of the stimulus package are out. Will it work? Has it been tested?Does anyone know?
Complicated economic/mathematical models have been run. But aren't they the ones which got us here?
Do they account for black swans? tipping points? cascades? power laws? multifractals? fat tails?cluster correlations? phase transitions? interactions? demographics? uncertainties? time frames?
The fact is that there are data mining, agent based, actuarially sound, data visualization, econometric tools available by which to truly test and monitor any stimulus scenario developed. The anticipated impact on the global and US economies as well as the individual sectors and businesses could be forecast. The options most likely to have the sustainable, transformative effect desired could be chosen and monitored and adjusted as needed.
How much more confidence would be inspired if officials could testify..."We anticipate (based on the best data and analysis availble) that this stimulus package will have an impact on GNP of $500 billlion in the first year with a 92% probability it will be at least $400 billion...the multipliers associated with the chosen components of the package are the largest of all those tested..."
Here are the details of the ($787 b) stimulus package passed this weekend:
$506 billion in spending
-$141b healthcare
-$92 b infrastructure
-$87b education
-$67b welfare
-$41b energy
-$10b housing
-$6b science
-$7b security
-$55b other
$281 billion tax credits
This money could be targeted and monitored at the micro level to have maximum impact. For example, the science money could to where it would have a multiplier of 22 or 1.
From the labs of Los Alamos to the campuses of Boston, the tools needed to assure that the stimulus works have already been developed. All we need to do is integrate them with those currently being used.
Yes we can
Lee
Friday, February 13, 2009
The Info Mesa
Ed Regis' book shows how Santa Fe became the nerve center of a movement which is changing the world. He documents the rise of dozens of companies which came to apply new methodologies, complexity science, chaos theory, nonlinear dynamics, artificial life, and so on to real world problems.
He traces the movement from Los Alamos where computer technology had exploded to deal with the complexity of nuclear physics to the Santa Fe Institute where an interdiscipinary approach to scientific research blossomed. The Institute would, "...blur the edges, merge the disciplines into a unique synthesis that was greater than the sum of its parts...large portions of empirical reality had been reduced to data...atoms, molecules, chemicals, proteins, genes cells...the planet itself...".
Years earlier, Mitchell Waldrop had written of the dawn of the complexity movement. Neoclassical economics had reduced "...the rich complexity of the world into a narrow set of abstract principles...when philosophers saw the cosmos as a ...vast clockwork device...governed by the Invisible Hand...small events could have large consequences..."
If there was ever a time for interdisciplinary, rigorous, creative, quantum thinking it is now. World markets are collapsing and entire countries are on the brink of collapse. Stimulus packages are being passed with little or no underestanding of how they might work.
Using the perspective of complexity science, levened by actuarial science, policymakers can test alternative approaches against alternative scenarios and dynamically choose those most likely to succeed. They could answer questions like, "What is the likelihood that the stimulus will raise the standard of living 30% within 9 months, and 50% after 18 months?"
Wouldn't that create more confidence than the current mantra," No one knows what to do...or what will happen if we do do"
The future of the US and world economies may be at stake. We may only get one chance.
We must do it right.
Yes we can.
Lee
He traces the movement from Los Alamos where computer technology had exploded to deal with the complexity of nuclear physics to the Santa Fe Institute where an interdiscipinary approach to scientific research blossomed. The Institute would, "...blur the edges, merge the disciplines into a unique synthesis that was greater than the sum of its parts...large portions of empirical reality had been reduced to data...atoms, molecules, chemicals, proteins, genes cells...the planet itself...".
Years earlier, Mitchell Waldrop had written of the dawn of the complexity movement. Neoclassical economics had reduced "...the rich complexity of the world into a narrow set of abstract principles...when philosophers saw the cosmos as a ...vast clockwork device...governed by the Invisible Hand...small events could have large consequences..."
If there was ever a time for interdisciplinary, rigorous, creative, quantum thinking it is now. World markets are collapsing and entire countries are on the brink of collapse. Stimulus packages are being passed with little or no underestanding of how they might work.
Using the perspective of complexity science, levened by actuarial science, policymakers can test alternative approaches against alternative scenarios and dynamically choose those most likely to succeed. They could answer questions like, "What is the likelihood that the stimulus will raise the standard of living 30% within 9 months, and 50% after 18 months?"
Wouldn't that create more confidence than the current mantra," No one knows what to do...or what will happen if we do do"
The future of the US and world economies may be at stake. We may only get one chance.
We must do it right.
Yes we can.
Lee
Wednesday, February 11, 2009
The Geithner Performance
It's not his fault.
No one knows what to do.
At least no one in Washington.
The tragedy is that a bailout/stimulus/budget package can be developed and tested which would meet the critria everyone has-that it gets the economy moving. From the labs of Los Alamos and Chicago to the campuses of Ann Arbor and Boston, models have been developed which are up to the task of analyzing all the proposals which are now randomly floating around Washigton.
Actuaries, physicists, economists, and computer scientists have develped data and analytical fameworks which will allow any proposal to be tested properly before implementation. The models have the needed demographic, interactive, temporal and probabilistic dimensions.
What confidence it would give the American public if the President could lay out scenarios describing how alternative expenditures would flow through the US and global economies. Multipliers for each element and for the program as a whole would be provided.
Yes we can.
Lee
No one knows what to do.
At least no one in Washington.
The tragedy is that a bailout/stimulus/budget package can be developed and tested which would meet the critria everyone has-that it gets the economy moving. From the labs of Los Alamos and Chicago to the campuses of Ann Arbor and Boston, models have been developed which are up to the task of analyzing all the proposals which are now randomly floating around Washigton.
Actuaries, physicists, economists, and computer scientists have develped data and analytical fameworks which will allow any proposal to be tested properly before implementation. The models have the needed demographic, interactive, temporal and probabilistic dimensions.
What confidence it would give the American public if the President could lay out scenarios describing how alternative expenditures would flow through the US and global economies. Multipliers for each element and for the program as a whole would be provided.
Yes we can.
Lee
Tuesday, February 10, 2009
Markets and Fish and the Global Economy
We have been making the case that no amount of government spending/stimulus will have the desired effects on the global and US economies unless properly targeted. Proper targeting requires data and analytics which can reasonably test alternative scenarios. Such data and analytics are currently not part of the dialogue on the economic crisis.
It does, however, exist.
In the current issue of Scientific American, an article by Paul Raeburn demonstrates clearly one of the deep values of complexity science-interdiscipinary perspective.
Mathematicians, physical scientists, biologists, social scientists, artists, doctors, military leaders, and economists all see patterns which impact on all aspects of life.
In the case of Raeburn's article, fisheries are seen as complex systems with characteristics many of which are similar to those of chaotic financial markets. As we indicate is the case with financial markets, that they are no longer amenable to conventional analysis, so with fishing, which is "...like the stock market-the crash of one or two species or a hedge fund or mortgage bank, can trigger a collapse of the entire system."
The same issue of Scientific American has a column on the stimulus. It indicates what should be obvious, that certain expenditures like electrical infrastructure and sustainable energy, may have multipliers many times those of other types of expenditure.
Only a complexity based actuarial model can test the various scenarios probabilistically demographically, interactively, and temporally.
Yes we can.
Lee
It does, however, exist.
In the current issue of Scientific American, an article by Paul Raeburn demonstrates clearly one of the deep values of complexity science-interdiscipinary perspective.
Mathematicians, physical scientists, biologists, social scientists, artists, doctors, military leaders, and economists all see patterns which impact on all aspects of life.
In the case of Raeburn's article, fisheries are seen as complex systems with characteristics many of which are similar to those of chaotic financial markets. As we indicate is the case with financial markets, that they are no longer amenable to conventional analysis, so with fishing, which is "...like the stock market-the crash of one or two species or a hedge fund or mortgage bank, can trigger a collapse of the entire system."
The same issue of Scientific American has a column on the stimulus. It indicates what should be obvious, that certain expenditures like electrical infrastructure and sustainable energy, may have multipliers many times those of other types of expenditure.
Only a complexity based actuarial model can test the various scenarios probabilistically demographically, interactively, and temporally.
Yes we can.
Lee
Thursday, February 5, 2009
Actuarial Model of the Economy
An actuarial model of the U.S. economy would be probabilistic, demographic, holistic, complex, and actuariall sound. It would incorporate Enterprise Risk Management, Dynamic Financial Analysis, General Linear Modeling, Econometrics, and Complexity Science.
Who cares?
Well, the global and U.S. economies are on their deathbeds, the environment is collapsing, we are running out of resources, and the demographics of upcoming generations is unsupportable by existing institutions.
Unless somebody in Washington realizes that the analytical tools being used to evaluate public policy initiatives are outdated, and prone to misdiagnosis, (how do you think we got here?) all the "geniuses" in the world (Summers, Geithner, Goolsby, Clinton, Kudlow, Welch, Bernacke, Volcker...) will fail.
Who cares?
Well, the global and U.S. economies are on their deathbeds, the environment is collapsing, we are running out of resources, and the demographics of upcoming generations is unsupportable by existing institutions.
Unless somebody in Washington realizes that the analytical tools being used to evaluate public policy initiatives are outdated, and prone to misdiagnosis, (how do you think we got here?) all the "geniuses" in the world (Summers, Geithner, Goolsby, Clinton, Kudlow, Welch, Bernacke, Volcker...) will fail.
Demonstrating a model which will supplement and transcend the impossibly complicated financial and economic models currently in use is not realistic on a blog.
The basic outline of such a model, however, can be attempted.
The modeling team will consist of physicists, mathematicians, economists, computer scientists, financial engineers and actuaries with a mix of management, technical, and public policy expertise.
Such a team does not currently exist as such.
The model input will be as much detail about the federal budget and national economy as is deemed feasible and useful. It will be enough data to see all the major interactions which occur as a result of government activity but not so much as to be analytically unworkable.
The analytics will be a mix of traditional econometric and financial models supplemented by advances in actuarial science, complexity science, data-mining and visualization, and computer processing which have thus far not been utilized in public policy modeling.
The output will be impact by area by time frame by uncertainty level of alternative government actions. For example, if $100 million of government largess is to be bestowed upon the "auto industry", the impact on all areas impacting and impacted by the auto sector will be shown under various scenarios.
If $100 billion is to be allocated to the "financial sector'" the various ways that the money can flow through the economy under various economic scenarios can be tested. That allocation can (to some degree) be targeted to have the desired impact on national welfare.
For more information, go to my website, paradigmactuaries.com.
Lee
Tuesday, February 3, 2009
The Obama Budget as an Agent Based Structure
The Obama Stimulus/Bailout Proposal is in trouble...for good reason...no one knows how it will work.
The tragedy is that there are analytical tools available which could tell us how various scenarios would play out. From the labs and universities of our country have emerged data mining, analytics, data visualization, computer processing and statistical models which can take the most complex issues and make them manageable.
The American and Global economies are complex systems. Their performance depends on complex interactions among a number of complex networks and webs.
Standard economic and financial models of the type still used in Washington have continually failed to address real world problems. The economic models, for all their apparant sophistication, still incorporate assumptions which have not been seriously updated for decades.
Financial models are largely based on the same Portfolio Theory structures which gave us Enron, Long Term Capital, and the recent global economic collapse over mortgage derivatives.
The reasons standard models don't work any more, if they ever did, is that they are not robust enough to respond to the real world. The real world is messy, uncertain, interconnected, and labyrinthine.
Traditional models postulate smooth patterns, rational behavior, and independent actions.
What the advanced models which exist in places like Los Alamos, Ann Arbor, Boston and Santa Fe do is to allow nature and the real world define itself. Using the latest data organization, analytical and visualization technology, they take raw data from the environment and let it sort itself into logical categories. They then adapt analytical structures to the patterns which emerge.
What his leads to is information for policy makers which is:
1. Holistic: All interconnections, emergences, cascades, fractal structures, and power laws are tested before conclusions are drawn.
2. Probabilistic: Various scenarios are run, and results are tabulated not just on an expected value basis, but with expected ranges of results by time frame.
3. Actuarially Sound: Demographics, credibility, homogeneity, risk and time value, are all incorporated into the model.
4. Emergent: When networks and webs result in projections where emergent structures transcend preliminary ones, those more robust projections are utilized.
As a result, the bailout and stimulus proposals can be blended with conventional government activity to produce scenarios by sector and in total. These scenarios will include probability ranges by time frame by sector.
Healthcare is a good example. In the U.S., healthcare is a complex web of patients, providers, corporations, government, employment, demographics, and administraton. Randomly injecting money into the systems will result in random welfare impact.
Only by following the money through the complex web of activity, and directing it at the micro level where possible is there a chance of having optimal impact on welfare, wellness, jobs, the deficit, and gdp.
The tragedy is that there are analytical tools available which could tell us how various scenarios would play out. From the labs and universities of our country have emerged data mining, analytics, data visualization, computer processing and statistical models which can take the most complex issues and make them manageable.
The American and Global economies are complex systems. Their performance depends on complex interactions among a number of complex networks and webs.
Standard economic and financial models of the type still used in Washington have continually failed to address real world problems. The economic models, for all their apparant sophistication, still incorporate assumptions which have not been seriously updated for decades.
Financial models are largely based on the same Portfolio Theory structures which gave us Enron, Long Term Capital, and the recent global economic collapse over mortgage derivatives.
The reasons standard models don't work any more, if they ever did, is that they are not robust enough to respond to the real world. The real world is messy, uncertain, interconnected, and labyrinthine.
Traditional models postulate smooth patterns, rational behavior, and independent actions.
What the advanced models which exist in places like Los Alamos, Ann Arbor, Boston and Santa Fe do is to allow nature and the real world define itself. Using the latest data organization, analytical and visualization technology, they take raw data from the environment and let it sort itself into logical categories. They then adapt analytical structures to the patterns which emerge.
What his leads to is information for policy makers which is:
1. Holistic: All interconnections, emergences, cascades, fractal structures, and power laws are tested before conclusions are drawn.
2. Probabilistic: Various scenarios are run, and results are tabulated not just on an expected value basis, but with expected ranges of results by time frame.
3. Actuarially Sound: Demographics, credibility, homogeneity, risk and time value, are all incorporated into the model.
4. Emergent: When networks and webs result in projections where emergent structures transcend preliminary ones, those more robust projections are utilized.
As a result, the bailout and stimulus proposals can be blended with conventional government activity to produce scenarios by sector and in total. These scenarios will include probability ranges by time frame by sector.
Healthcare is a good example. In the U.S., healthcare is a complex web of patients, providers, corporations, government, employment, demographics, and administraton. Randomly injecting money into the systems will result in random welfare impact.
Only by following the money through the complex web of activity, and directing it at the micro level where possible is there a chance of having optimal impact on welfare, wellness, jobs, the deficit, and gdp.
Historical transformations in the eras of the automobile, computer, electronics, and so on have shown definite patterns. The need now is for a sustainable transition which is envoironmentally friendly and resource efficient.
Future blogs wll provide additonal material on models which respond to the landscape of the twenty first century.
Lee
Saturday, January 31, 2009
Obama's First Stumble
It had to happen.
It's kind of a relief.
Nobody's perfect.
The bailout/stimulus proposal which came out this week won't work!
It's not Barack's fault. He needs to rely on his advisers even as he occasionally transcends them.
It's really not their fault either. They don't know any better. No one told them that their failed models need updating.
But it'a too important to ignore. Between the Federal Budget and potential stimuli/bailouts, there are trillions of dollars at stake. More importantly, there is the opportunity to transform the economy into one that is sustainable and more just.
We are at the edge of a precipice that we created, and we only get one chance to step back and save the economy.
Does it make sense to continue to spend government money based on analysis which has proven to be wrong so many times?
Such a model can supplement existing economic, financial and public policy models in determining where spending will have optimal effect, what the uncertainties are, how to make adjustments dynamically, how to handle interactions, and all the other factors existing models ignore or miss.
The best minds in Washington are doing their best, but is isn't good enough. Some of the programs proposed will have some positive impact, but no one knows how much, or whether more innovative approaches would have much more effect.
What if we find, that using the best analytics possible, the impact of bailout and stimulus activity can be increased 100 fold or more over the next decade?
Should we at least consider it?
The global economy is collapsing.
Social Security is effectively bankrupt.
The healthcare system is crumbling under its own weight.
The deficit is dangerous, particularly if forecasts of the future US economy are distorted.
None of these issues are adequately addressed in proposals made to date.
The Federal Budget, along with all bailout and stimulation activity is a complex system which impacts a web of other complex systems. Government spending impacts the healthcare system, the infrastructure system, the prison system, the retirement system, the welfare system, the education system, and a variey of other systems, not to mention foreign relations.
Each of these systems has subsystems like housing, transportation, energy, goods, services, environment, medicine, and so on.
No model in place in Washington can deal with the interconnections, demographics, uncertainties, management, and data requirements of such a complex network.
We can transform the economy successfully . We can evolve into a country with sustainable and just results.
We have the intellectual resources.
We have the technical resources.
Yes we do.
Lee
It's kind of a relief.
Nobody's perfect.
The bailout/stimulus proposal which came out this week won't work!
It's not Barack's fault. He needs to rely on his advisers even as he occasionally transcends them.
It's really not their fault either. They don't know any better. No one told them that their failed models need updating.
But it'a too important to ignore. Between the Federal Budget and potential stimuli/bailouts, there are trillions of dollars at stake. More importantly, there is the opportunity to transform the economy into one that is sustainable and more just.
We are at the edge of a precipice that we created, and we only get one chance to step back and save the economy.
Does it make sense to continue to spend government money based on analysis which has proven to be wrong so many times?
Would it make sense to allocate a small portion of new government spending on the development of a new structure for public policy analysis which has proven itself many times?
The answers are obvious.
There is a team of the best minds in the fields of particle physics, complexity science, actuarial science, and computer science ready to be assembled. They can build a model with the best data mining, enterprise risk management, dynamic financial analysis, data visualization, demographic, probability, and management analytics available.Such a model can supplement existing economic, financial and public policy models in determining where spending will have optimal effect, what the uncertainties are, how to make adjustments dynamically, how to handle interactions, and all the other factors existing models ignore or miss.
The best minds in Washington are doing their best, but is isn't good enough. Some of the programs proposed will have some positive impact, but no one knows how much, or whether more innovative approaches would have much more effect.
What if we find, that using the best analytics possible, the impact of bailout and stimulus activity can be increased 100 fold or more over the next decade?
Should we at least consider it?
The global economy is collapsing.
Social Security is effectively bankrupt.
The healthcare system is crumbling under its own weight.
The deficit is dangerous, particularly if forecasts of the future US economy are distorted.
None of these issues are adequately addressed in proposals made to date.
The Federal Budget, along with all bailout and stimulation activity is a complex system which impacts a web of other complex systems. Government spending impacts the healthcare system, the infrastructure system, the prison system, the retirement system, the welfare system, the education system, and a variey of other systems, not to mention foreign relations.
Each of these systems has subsystems like housing, transportation, energy, goods, services, environment, medicine, and so on.
No model in place in Washington can deal with the interconnections, demographics, uncertainties, management, and data requirements of such a complex network.
We can transform the economy successfully . We can evolve into a country with sustainable and just results.
We have the intellectual resources.
We have the technical resources.
Yes we do.
Lee
Saturday, January 17, 2009
The Obama Economic Plan-An Agent Based Model
Our new President will be sworn in Tuesday.
His first priority will be to "fix the economy".
Unless someone in his circle knows about agent based modeling and other complexity science and actuarial tools, he will fail.
The current plan appears to consist of the following as the next "phase" of the "stimulus/bailout":
$550 billion for infrastructure, science, energy, and education programs over two years.
$275 billion in tax cuts for businesses and consumers.
Sounds good.
But has anyone done a cost-benefit analysis of how this spending in conjunction with the other $2.8 trillion in government spending will transition us toward a sustainable future of fiscal wealth and harmony?
We want it to be easy. Just pick out a few programs and, boom, economic nirvana.
Not.
We've tried that.
Now we are $60 trillion in the hole (Don't forget Social Security, Medicare, Veterans benefits...), are adding about a $ Trillion a year, and GNP is tottering as global resources decline.
If some measure of GNP doesn't start to grow dramatically, game over.
Happily, there is hope. In the labs of Los Alamos, Santa Fe, Batavia, Champaign, Ann Arbor...models have been developed which can definitively show how expenditures can ripple through a global economy and which can test alternative approaches.
We can use these models to find stimulus and bailout programs which could actually create an engine of economic growth for the U.S.
These models didn't exist in the 1930's, so trial and error had to happen in the real economy. We can now simulate the economy and test various scenarios. That way we can have a sense of long term welfare effects of whatever expenditures are deemed worthy.
Isn't it worth the effort?
The alternative is to keep randomly throwing money at a system which has proven itself incapable of meaningful transition.
Our production systems, housing systems, transportation systems, healthcare systems, financial systems, education systems, welfare systems...are all interconnected.
All must be transformed simultaneously for real change to occur and real welfare to be increased
Are we up to the task?
Yes we are.
For more go to paradigmactuaries.com
Lee
His first priority will be to "fix the economy".
Unless someone in his circle knows about agent based modeling and other complexity science and actuarial tools, he will fail.
The current plan appears to consist of the following as the next "phase" of the "stimulus/bailout":
$550 billion for infrastructure, science, energy, and education programs over two years.
$275 billion in tax cuts for businesses and consumers.
Sounds good.
But has anyone done a cost-benefit analysis of how this spending in conjunction with the other $2.8 trillion in government spending will transition us toward a sustainable future of fiscal wealth and harmony?
We want it to be easy. Just pick out a few programs and, boom, economic nirvana.
Not.
We've tried that.
Now we are $60 trillion in the hole (Don't forget Social Security, Medicare, Veterans benefits...), are adding about a $ Trillion a year, and GNP is tottering as global resources decline.
If some measure of GNP doesn't start to grow dramatically, game over.
Happily, there is hope. In the labs of Los Alamos, Santa Fe, Batavia, Champaign, Ann Arbor...models have been developed which can definitively show how expenditures can ripple through a global economy and which can test alternative approaches.
We can use these models to find stimulus and bailout programs which could actually create an engine of economic growth for the U.S.
These models didn't exist in the 1930's, so trial and error had to happen in the real economy. We can now simulate the economy and test various scenarios. That way we can have a sense of long term welfare effects of whatever expenditures are deemed worthy.
Isn't it worth the effort?
The alternative is to keep randomly throwing money at a system which has proven itself incapable of meaningful transition.
Our production systems, housing systems, transportation systems, healthcare systems, financial systems, education systems, welfare systems...are all interconnected.
All must be transformed simultaneously for real change to occur and real welfare to be increased
Are we up to the task?
Yes we are.
For more go to paradigmactuaries.com
Lee
Sunday, December 14, 2008
December Sunday
It's Sunday again...Home of the talkingheadosphere. The blogosphere is becoming the Blagosphere.
Who knew? A crooked politicican. Next thing you know we'll find a greedy businessman. Or a stupid athlete. Or an entertainer with a drug problem.
As we watch the wizards of pontification droll on about the being and nothingness of the political sphere it is interesting to raise our heads to listen to a more promising group of thinkers.
The January 2009 Discover issue about the Year in Science has articles about medicine, physics, energy, and astronomy. These people actually back their arguments with relevant facts.
Take the physicists (please:).
Turns out that The Large Hadron Collider (LHC) which debuted in the fall of 2008 is looking for the God Particle. One can only imagine that this is harder than finding a crooked politician.
In addition to possibly swallowing us all into a massive black hole, the LHC may find supersymmetric particles That would be a huge step toward a Theory of Everything (TOE).
Now that seems like something worth a little time and money.
Of course, the Bush Administratoin is so busy trying to implement the vision of Tim Lehaye that it has no time or resources for such drivel. They even want to cut back on such basic research in places like Fermlab, Argonne and Los Alamos.
This of course is not the first Bush Administration to take on such waste. Daddy killed a facility in Texas which might have already found the secret of the universe. Apparantly it was too close to one of the landing paths he wanted to preseve for his subsequent skydiving.
Many people only care, of course, if they think a TOE would help them personally. They have perhaps forgottten (or God forbid never know) that reseach like this has been responsible for much of the advance made by the human species in recent years.
Health, wealth, the environment and defense are all beholden to advances which have been made in esoteric areas like quantum mechanics and complexity science.
Anyway, like you, I'm ready to settle in and start to absorb the pearls of wisdom which will be offered today by such scholars as Newt Gingrich, Bob Dole, and Mitch McConnell.
Lee
Who knew? A crooked politicican. Next thing you know we'll find a greedy businessman. Or a stupid athlete. Or an entertainer with a drug problem.
As we watch the wizards of pontification droll on about the being and nothingness of the political sphere it is interesting to raise our heads to listen to a more promising group of thinkers.
The January 2009 Discover issue about the Year in Science has articles about medicine, physics, energy, and astronomy. These people actually back their arguments with relevant facts.
Take the physicists (please:).
Turns out that The Large Hadron Collider (LHC) which debuted in the fall of 2008 is looking for the God Particle. One can only imagine that this is harder than finding a crooked politician.
In addition to possibly swallowing us all into a massive black hole, the LHC may find supersymmetric particles That would be a huge step toward a Theory of Everything (TOE).
Now that seems like something worth a little time and money.
Of course, the Bush Administratoin is so busy trying to implement the vision of Tim Lehaye that it has no time or resources for such drivel. They even want to cut back on such basic research in places like Fermlab, Argonne and Los Alamos.
This of course is not the first Bush Administration to take on such waste. Daddy killed a facility in Texas which might have already found the secret of the universe. Apparantly it was too close to one of the landing paths he wanted to preseve for his subsequent skydiving.
Many people only care, of course, if they think a TOE would help them personally. They have perhaps forgottten (or God forbid never know) that reseach like this has been responsible for much of the advance made by the human species in recent years.
Health, wealth, the environment and defense are all beholden to advances which have been made in esoteric areas like quantum mechanics and complexity science.
Anyway, like you, I'm ready to settle in and start to absorb the pearls of wisdom which will be offered today by such scholars as Newt Gingrich, Bob Dole, and Mitch McConnell.
Lee
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