Recently, Capitol Hill has been agonizing over a Congressional Budget Office (CBO) report that claimed Obamacare was slowing the nation’s recovery.
The biggest takeaway is that the report exposes the government’s flawed statistics. In fact, the CBO casts a glaring spotlight on the hoax that is Keynesian economic theory.
This shouldn’t come as a surprise because Obama’s administration lies more than any of its predecessors. The coup de grâce is twisting people’s perception of the economy by promoting false statistics.
Heck, we don’t even need a lie detector test, as the statistics serve as perfect proof.
Take, for instance, the recently adjusted labor force estimates. The CBO report tells us that, by 2024, nearly 2.5 million willing and able Americans won’t be working because of Obamacare.
This is a serious correction from the office’s original estimate in 2010. In fact, the CBO admitted that it’s a “substantially larger” and “considerably higher” subtraction from the labor force than the mere 800,000 that the budget office first estimated. On top of that, the overall level of labor force participation will fall by 1.5% to 2% over the next decade, according to CBO computers.
This trend of misleading statistics is seriously worrisome. Fortunately, there’s somewhere that Americans can turn to be better informed.
Disputing the Government’s Misleading Data
I’ve written before about shadowstats.com, which I consider a must-follow resource.
The website’s founder is John Williams, who boasts an A.B. in Economics, cum laude, from Dartmouth College in 1971 and an M.B.A. from Dartmouth’s Amos Tuck School of Business Administration in 1972. Williams provides a more accurate account of government statistics than the government itself provides.
According to Williams – and I would trust him much more than the Bureau of Labor Statistics (BLS) – the unemployment rate is close to 23%. The BLS claims that it’s a mere 6.6%.
How is there such a discrepancy? Well, the government uses sleight of hand to move people in and out of a category that they call “labor force participation.” By manipulating the participation rate, the government can report the unemployment level that it desires.
The BLS rate of 6.6% is already mocked enough, as most people find it increasingly hard to believe. And to keep unemployment from dropping below 6%, the Bureau actually increased the labor force participation by 499,999 in January, issuing what it calls the “annual adjustment of the population controls.” This is another example of the government just making up the numbers as it goes.
And the manipulation doesn’t stop there. Inflation is treated the same way.
For example, the U.S. government claims that the consumer price index (CPI) is below 2%. This is a really important number used to calculate a variety of payments, such as social security cost-of-living increases. By keeping the CPI down, the government keeps payments down. But shadowstats.com believes that the CPI number should be closer to 5%.
The worst part of the misleading statistics is their resulting domino effect.
You see, if the CPI figures are wrong, then the gross domestic product (GDP) numbers are wrong, too. GDP is a price-adjusted figure that lets us know whether the economy is actually growing. Getting price increases wrong could lead to claims that the economy is growing even when it’s likely not.
Consider this example: If a car sells in one year for $35,000 and the next year for $40,000, without the price adjustment, you’d likely think GDP grew by $5,000. But the product didn’t expand at all… You still have just one car. The economy for this car is stagnant.
For GDP to truly grow, more cars need to be going out to more consumers, rather than the same number of cars at higher prices. The price increase isn’t an increase in real economic growth; it’s the nominal growth that comes from prices increasing.
These are complex issues, and the government counts on your eyes glazing over until you switch your television to ESPN, Dr. Phil, or NCIS… really anything to keep you from understanding what’s going on.
Unfortunately, Obama’s economic policies are creating headwinds just when America should be really growing again.
This commentary originally appeared at CapitolHillDaily.com and is reprinted here with permission.