Generating economic statistics is an important public task

In various parts of the world, politicians are waging war on the economic statistics that help people assess the performance of their leaders. Over the past few years, the Argentine government has reported inflation rates more than 12 percentage points below private-sector estimates, and has filed criminal charges against statisticians attempting to publish their own data.
Late last year, Greece launched a criminal investigation of the head of its statistical agency for reporting larger budget deficits than the government deemed appropriate (or, as he put it, for “not cooking the books”).
If you think such degradation of national statistics couldn’t happen in more developed countries, think again.
In the U.S., a battle is brewing in Congress over two of the most valuable gauges of the nation’s economic health: the American Community Survey and the Economic Census. The data sets, which the U.S. has maintained in some form since the early 1900s, provide researchers and the public with a trove of information on everything from the size of families’ mortgage payments in Boise, Idaho, to the nation’s median annual income.
The data play a crucial role in calculating the performance of the entire U.S. economy, and in deciding how public funds should be allocated. Economists use them to figure out whether government policies are working. Businesses use them to study demographic trends and inform important decisions. The clarity they provide helps make the U.S. particularly attractive for foreign investment.
In early May, legislators in the U.S. House passed a bill that would eliminate both surveys, on the grounds that they are too intrusive – even though no information identifying the participants is ever released to the public. Robert Groves, the director of the U.S. Census Bureau, says ending the surveys will “devastate the nation’s statistical information.” In reality, the cost of data collection is minimal. The statistical agencies that collect most economic data – the Census Bureau, the Bureau of Economic Analysis and the Bureau of Labor Statistics – account for less than 0.05 percent of President Barack Obama’s $3.7 trillion proposed budget.
Why, then, are politicians attacking statistics? Perhaps they have become so accustomed to good data that they fail to recognize what life and governance would be like without them.
It’s hard to overstate how dangerous the destruction of high-quality, objective statistical information would be. Policy-making would become more subjective, and hence more ideological. Governments would have more leeway to lie to the people about the success of their policies and the state of the economy.
If the bill to eliminate the U.S. surveys makes it to President Obama’s desk, he should use his veto power. &#8226


Emi Nakamura is the David W. Zalaznick associate professor of business at Columbia University, and a member of the technical advisory committee of the Bureau of Labor Statistics. Jon Steinsson is an associate professor of economics at Columbia University. Nicolas Vincent is an assistant professor of economics, HEC Montreal.

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