March 07, 2025

More On Counting Federal Spending As A Full-Value Addition To GDP

March 07, 2025/ Francis Menton

My last post on Tuesday has inspired a spirited debate in the comments about how federal spending should properly be accounted for in GDP. What is the right answer? After reading the comments, it occurs to me that there are several more points to make.
For those criticizing or disagreeing with my post — led by prolific commenter Richard Greene — the main theme has been that many large categories of federal spending make an obvious positive contribution to the economy. Examples given include the Defense Department, teachers/education, and national parks.
Surely excluding those kinds of things entirely from GDP accounting would provide at least as deceptive an indicator of the true size of the economy as including them at full cost value. And if those kinds of things, and many others, are not included at full cost value, what is the alternative? Some flat percentage discount could be applied, but there is no obvious constant level of discount that would be appropriate for all categories of spending; and reasonable people could disagree on varying levels of discount for different categories. Maybe defense should even be included at a premium!
My answer to this critique was at least suggested in the prior post. . . .

March 04, 2025

Is Some Honesty About To Come To Government Economic Statistics?

March 04, 2025/ Francis Menton

A recurring theme at this blog over the years has been the rank dishonesty of many of our government’s economic statistics.
Rather than being neutral indicators of the state of the country and its economy, the most important government statistics have been crafted and manipulated to maximize their usefulness to advocates for increases in the size of government and in government spending. Here is a particularly detailed post on this subject from back in December 2016.
The two main areas of focus here have been the statistics on GDP and on poverty. Both of those come from the Commerce Department.
In the case of GDP, the biggest issue is that government spending on goods and services is counted as a 100-cents-on-the-dollar addition to GDP. That means that the most wasteful spending gives an apparent but false boost to the economy; and even more importantly, that any cut to government spending, no matter how wasteful the spending may have been, gets portrayed as a hit to the economy and a harbinger of recession.
For today, I’ll consider the GDP statistics.

September 16, 2023

September 16, 2023/ Francis Menton

As I have written many times, I don’t think that the federal measure of “poverty” in the United States was originally created with fraudulent intent to deceive the voters.
However, as the measure of poverty has evolved over the years, the thing deemed “poverty” by the statistics no longer bears any meaningful resemblance to what normal people think of as poverty. Rather than measuring anything that might resemble actual physical deprivation, the statistics have evolved into an artifact to manipulate the voters. In a post about a year ago I described what I call the “poverty scam” as follows:
[T]he government cynically manipulates the poverty statistics so that the official measured rate of poverty never goes meaningfully down, no matter how much taxpayer money is spent, thus manufacturing a fake basis to hit up the people for ever increasing funding at regular intervals.
Over the past week or so we have just been treated to the umpteenth iteration of this poverty scam.

December 21, 2022

December 21, 2022/ Francis Menton

Throughout the agencies of our federal government, an important function is to issue data and information about the state of the country.
These data cover a vast array of topics such as population, demographics, income and poverty, the state of the economy, the GDP, employment and unemployment, activities of foreign adversaries, weather and climate, energy production and use, and much, much more. The Congress and states use this information in making important public policy decisions, and the people use it to make decisions for their everyday lives. Not the least of those decisions is how to vote.
So is the information issued by the government basically honest and reliable for important decisions? Or, instead, is the output of official information cynically manipulated and corrupted by a government interested mainly in perpetuating and increasing its own power?

November 02, 2022

November 02, 2022/ Francis Menton

The Supreme Court arguments in the Harvard and University of North Carolina affirmative action cases took place on Monday. I listened to some substantial portion, although it was not possible for me to listen to the whole thing (some 5 hours in total). From what I heard, I agree with most commenters that affirmative action in the form currently practiced throughout academia is not likely to survive.
Affirmative action is one of those issues on which the opinions of our intellectual elites diverge almost completely from the opinions of normal people.
In a piece on Tuesday (November 1) discussing the likely outcome of the Harvard/UNC case, the New York Times took note of the broad public opposition to affirmative action in college admissions, even extending to heavily Democratic constituencies:

October 25, 2022

October 25, 2022/ Francis Menton

Yesterday the Concerned Household Electricity Consumers Council (CHECC) filed a corrected version of its opening brief challenging the EPA’s Endangerment Finding as to CO2 and other greenhouse gases.
The brief can be found here.
The bizarre reason for the “corrected” filing was that the clerks at the DC Circuit rejected our initial filing on the ground that we used an excessive number of acronyms. They have a rule encouraging you not to use too many acronyms, but the rule gives no clue as to how many is too many. When you use the term “greenhouse gases” thirty times, should you shorten it to “GHGs,” or write it out every time? You only find out when they bounce the brief and require you to correct it. Anyway, with any luck the linked version is now the final one.
When you take a look at the brief, you will see that we are directly and openly challenging the fake science of predicted catastrophic human-caused global warming from GHGs.