An amusing article in the latest Bloomberg Businessweek describes a game called Buy A Feature that helped residents of San Jose prioritize the city’s budget.

Why is the story amusing? Because it exposes how little San Jose residents — and business executives who also have employed game designer Luke Hohmann’s products — seemed to know about a key tenet of economic thought: trsde-offs.

Tom Wesselman, an executive at Cisco who used a Hohmann game to make decisions about design features in the company’s Cius tablet, says Hohmann helped overcome a cultural hurdle: Every department expected perfection, and to ship the product, everyone had to accept a little imperfection.

“We learned there were deep tradeoffs,” he says.

That’s Hohmann’s specialty: getting people with seemingly competing interests and vastly different viewpoints to understand tradeoffs and make hard choices. It’s a skill he thinks government needs right now.

“We’re just a little Silicon Valley company with a little dream to have 200 million Americans all playing a game together to fix Social Security.”

Like many U.S. cities, San Jose lost revenue during the recession and faces growing employee retirement expenses. The city is projecting a deficit of $22.5 million in 2013. Before 2011, its community budget meetings typically featured PowerPoint lectures, a question and answer session with the mayor, and an open forum for public comment.

That format gave the most weight to “the most vocal people,” says Harkness. “That’s a bad sample. People can say whatever they want without having to wrestle with complexity. It encourages extreme thinking.”

Perhaps it’s a good time to highlight Thomas Sowell‘s definition of economics: “the allocation of scarce resources which have alternative uses.” In other words, economics forces people to deal with trade-offs, rather than lament the fact that we “aren’t doing enough” to address some favored public policy goal.