Complexity Economics and the Almost-Shutdown of 2011

Like many of you I spent my evenings over the last week watching the news networks as various experts debated the looming shutdown. I heard the various economic arguments around the budget battles and I was constantly struck by the thought that decisions concerning peoples’ lives and security were being decided by a 19th century science that is essentially broken. It’s like using a GPS to drive around D.C. and the map that is displayed is that of Middle Earth (Lord of the Rings’ world).

This latest budget battle and the even bigger future battle for the 2012 budget call out for using better tools and concepts to make sure that funding decisions are based on how the economy actually works and not on flawed models. We need to introduce complexity economics into the debate because we need to know how budget policy ACTUALLY affects the American public and our government agencies. We also need to realize just how overconnected our economy has become internally and externally and be alert for the dangers of overconnection.

We need a good honest debate about how to fix the American economy and make it grow again. And fundamental to that debate is good information about the actual problems in the economy. If we continue to take in the flawed models and bad data given by traditional economic analysis then we will continue to make bad policy. It is just simple Garbage-In, Garbage-Out. And America just can’t afford that.

Disclaimer: The opinions expressed in my posting are solely my own and do not represent the positions of any of my employers or any groups I am affiliated with and should not be construed as such.

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