Actually this idea has a lot of value, it was just rolled out in the wrong way and at the wrong time.
Financial markets are surprisingly effective at predicting future events. See peeps old thread in handicapping zone about how, in horseracing, favorites come in the most often, 2nd choice second most often, etc. Tradesports got huge press when traders there were able to pin down the exact day that Baghdad would during the war. Anyone with a basic knowledge of economics knows the value of open markets.
Essentially, opening a market like this allows everyone who has any information to provide it and assimilate it into the market. Instead of having a bunch of bureaucrats trying to figure out when and what the next terrorist attack will be, they are basically turning that decision making over to the masses.
For instance, let's say they were to post a line on "what airport will have the next major security breach involving terrorists?". If you are the security supervisor at LaGuardia and know your security has some weaknesses due to understaffing, you might bet on your own airport. Likewise, a janitor at O'Hare may know that there are ways to get in a "backdoor" or that some uniforms have been missing recently, facts that his supervisor may blow off or would never have passed on to the proper authorities. A flyer may notice that he always gets searched at one airport and never at another. A frequent subway rider in NYC may notice that security is lax at certain times, and can bet on that for another event.
All of these little bits of information would be assimilated into the market and reflected in the price. This would give the government a "heads-up" for potential problem areas. No matter how much manpower the government put into researching events, they would never be able to get the quantity of information that would be reflected in an open market trading situation. Becuase it is financially-driven, people who are "most sure" of their information would tend to wager larger amounts...those that are barely sure would perhaps not wager at all.
There are obvious ethical problems with this...rewarding people for predicting catastrophe and allowing terrorists access to more information are among the most important.
This was actually a decent idea, but was rolled out before it was fully thought through (a bad habit of american politicians) and smeared by the press. Probably will never get off the ground in a ausable form due to this mistake.
. If the gov is smart they just open up the whitehouse casino and sportsbook and regulate it
