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The Truth about Government Statistics

Nearly every day the government reports valuable information to us about critical details about our economy. Numbers like unemployment and the Consumer Price Index are the most well know. These numbers are supposed to educate us about what is happening in the economy, and how well our country is doing.

The True CPI is Far Higher

There is just one small problem. Many of these values are not true. The government simply makes them up. The result is that they make us feel better and make the government look better. It seems that President Obama believes that people should be treated fairly and that the government needs to support its citizens. I think these government lies would be a great thing for him to clean up.

Everyone knows that statistics can lie. It is very easy to report any numerical data so that it means anything we desire. Our government has gotten very good at this. One of the biggest statistical lies that it tells is the Consumer Price Index, known as the CPI. It is supposed to tell us how much prices have risen over the past year.

There are two major ways that the government distorts the CPI:

  1. The government is always changing the “basket of goods” that is used to calculate the CPI. If the price of one kind of shoe has risen by 50% over one year, there is a simple solution. Just replace that shoe with another shoe that has not risen in price. This makes the CPI very inaccurate.
  2. Core CPI is the figure most frequently reported by the media. Core CPI excludes the two things that we need most: housing and energy. Although these costs have nearly doubled in the last few years, the media and the government conveniently ignore them.

Why is this important?

I think every American needs to know what is happening with our economy because it affects our future. The government is diluting the value of every dollar that we own by printing money on an unprecedented scale. This is really theft from everyone who owns dollars.

The Dollar is Even Weaker

For more information, check out ShadowStats.com. Here is a report about the threat of hyperinflation, which is the ultimate threat to our economy.

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  1. November 2nd, 2010 at 17:44 | #1

    I agree with you there. Unfortunately, we have no choice but to take and accept the data as it comes out because everyone else follows them and the market reacts accordingly. If you are long term investors, then these data should not affect too much of your investment strategy.

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