Wednesday, November 14, 2007

Government Economic Data Doesn't Add Up

If you ever wonder why your experience doesn't seem to match what is reported by the federal government, you're not alone. It probably has to do with the fact that since the late '80s, reporting methods have kept changing to make the sitting president look better. So when people start throwing around numbers relating to past CPI, unemployment, inflation, etc., it gets frustrating very quickly as everyone seems to have different numbers for the same reporting periods.

As a NEWS YOU CAN USE tip, check out John Williams' Shadow Government Statistics site. Although it's set up as a paid subscription service, he provides quite a bit of education free to visitors. It's enlightening as well as frightening.

During the Clinton years, for example, unemployment rates were played with several times so that today's unemployment is grossly underreported. Likewise, inflation reads artificially low under our current reporting methods. Add to this comparisons with other countries who have their own reporting methods and self-serving biases and it's easy to become somewhat cynical with it all.

Preferring to live in a slightly rosy world, however, rather than think of it as deceitful, I choose to consider it all as creative. And knowing how the system works, I can simply take this creativity into consideration when looking at the numbers.

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