Real Economic Statistics About the U.S. Economy that the Government Doesn’t Want you to Know

It has become increasingly acceptable to offer the American public falsified economic data. For years, I have critically evaluated the economic statistics the government gives us and have come to the conclusion that our government has been misleading us. It seems that my conclusions have another backer in Kevin Phillips, a former Nixon adviser. His new book entitled, Bad Money: Reckless Finance, Failed Politics, and the Global Crisis of American Capitalism chronicles the corruption of official economic data.

The dubious numbers released by official federal government agencies are used to steer critical aspects of social and public policy. If the actual numbers presented are wrong than the formulated policy is wrong. Some of the main statistics, such as the Gross Domestics Product (GDP), Consumer Price Index (CPI), Unemployment Rate presented to the people are completely fraudulent. If a corporation lies about its numbers, the executives would see themselves in jail and its business heavily fined by the government.

But there is no oversight of the government’s manipulation of economic statistics, the elected officials, the corporations, and the federal agencies have a vested interest in not rocking the boat. After all, who wants to face the music from the American people, if the truth comes out that the economic statistics and the economy built around them are a complete hoax? The economy is in far worse shape than can be imagined.

Let’s look at a comparison between government economic statistics and the true statistics:

Official Unemployment Rate: 5.7 percent (July 2007)

Real Unemployment Rate: 9-12 percent
The real unemployment rate includes total unemployed, all marginally attached workers, discouraged workers, and total employed part time for economic reasons but are willing to work full-time. According to the Bureau of Labor Statistics, marginally attached workers are people that aren’t working or have given up looking for work but want to work and are available for a job and have looked for work sometime in the past. Discouraged workers, a are a derivative of marginally attached workers and for some reason have given a job-market related reason for not longer looking for a job.

Official Gross Domestic Product: increased at an annual rate of 1.9 percent in the 2nd quarter of 2008

Real Gross Domestic Product: This has been in recession for quite some time, as a person you feel it in your pocket but somehow the government is informing you that it is all in your mind, you are imagining a recession.

Well, it is not your imagination; the nation has not had growth but inverse growth.

Official Inflation: 2 to 3 percent

Real Inflation Rate: Only an ill-informed public would believe that the real inflation is so low. With rising prices for commodities, unemployment, declining wages, declining standards of living, an American dollar as valuable as Monopoly money, and skyrocketing consumer and federal debts, the real inflation is between 7 and 10 percent.

The latest deceptions are with housing. The decline in housing has been as much as 15% worse than officially reported that means there is much more of a job loss than officially acknowledged. Many home construction related jobs are not reported to jobless insurance programs, as many of the workers are immigrant workers paid in cash.

Phillips traces back the corrupt practices of the government going back almost 50 years. He mentions in his book that John F. Kennedy appointed a committee to recommend avenues of change to the calculation of official joblessness. With his approval, the use of the category of “discouraged workers” was implemented to no longer count them in unemployment statistics.

Meanwhile, Nixon proposed that the Labor Department publish the lowest figure between unadjusted unemployment and seasonally adjusted numbers. Fortunately, this attempt at manipulation was too overt for even government officials to implement. However, under Nixon’s regime, “core inflation” was devised to exclude certain areas like energy and food, on the grounds of the “volatility” of these sectors. The justification for the exclusion was that these prices fluctuated too frequently thus, it was best to remove them from the official survey.

The author points out that the Regan administration dreamed up the “Owner Equivalent Rent” measurement to artificially lower the cost of housing, hence addressing the irritant of housing in the inflation index.

Also, Regan started the policy of counting the armed forces personnel as part of the labor force, which reduced the unemployment rate. This is odd because the armed forces are not counted as civilians.

Under George H.W. Bush’s presidency, inflation statistics were recalculated to give more weight to retail and service sectors, thus reducing the official inflation rate.

Phillips explains that economic statistics tinkered by both parties have remained permanent and used by the Bureau of Labor Statistics.

The federal government’s Enron-style accounting is pervasive and ingrained that America could be bankrupt and the public not even be aware of it.

Most figures emanating out of Washington are in some manner greatly distorted. Since every administration going back 4 to 5 decades has “reformed” the process, economic statistics cannot be trusted as every change has been grandfathered in by each successive administration.

The cumulative effect of the re-calculation of critical economic data has added up to project a gross distortion of reality placing in peril your financial future.