Government Statisticians Monkey Around with Pension and GDP Numbers

The soup lines today are virtual.
The soup lines today are virtual.


There they go again.

We have previously pointed out that government revision of economic measurement methods over the years has steadily reduced reported inflation and unemployment. If inflation were measured as it was in the 1970’s, our consumer price inflation would not appear so low. If unemployment were measured as it was in the 1930’s, it would be apparent that we have been and still are in a depression. Many of the most important changes came under President Clinton. The dot-com bubble alone made that administration’s numbers look good, and the changes made them even better. Did the White House have a hand in it? No one knows.

Now the government’s statisticians are revising Gross Domestic Product ( GDP) calculation which in turn changes other calculations including inflation. One notable change: pensions will be counted when accrued rather than when paid. This alone should help drive GDP numbers up but will also give a false picture, since many of those pension payments may never materialize. Everyone knows that underfunded or non-funded pensions, especially state and local government pensions, are one of the principal risks of our debt-ridden economy. So why did the government decide to switch to made up pension numbers just now? Did the White House have a hand in this change? No one knows or is likely to know.

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