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How Do Know When the Government’s Lying? Their Estimates Are Moving

FF Wiley  ( Original )
APR 24, 2018

Here is the latest reminder that the data so often cited by the mainstream media as the gospel truth is often generated by the government.

Economic data disseminated by the government is like pharmaceutical trial data disseminated by pharmaceutical companies. It’s anything but objective, and you can bet your bottom fiat dollar (not that it’s worth much anyway) that it’s been “massaged” within an inch of its life to conform to the narrative that its disseminator wants to perpetuate.

Judging by what you read and hear in the mainstream media, the CBO is an absolute authority on all things government debt. It’s independent, nonpartisan and full of experts on economics and budgeting.

When it tells us debt will reach 96% of GDP in ten years time, as in the baseline scenario that dominates media coverage, that’s a figure we can rely on.

But in fact, reality doesn’t match the reputation. Sure, the CBO’s experts know the ins and outs of governmental budgeting, and they’re almost certainly good people (I’m not calling them idiots and liars).

But they’re human, they’re beholden to other humans, they work in an institution created by humans, and all of that means they operate under constraints and biases:

  • They face fierce political pressure from a Congress that wants to be seen as fiscally responsible even though it’s anything but;
  • they face equally fierce peer pressure from trained economists who insist on head-in-the-sand forecasting methods;
  • they have to abide by governing statutes that invite a variety of lawmaking shenanigans; and
  • they’re surely reluctant to be the bearers of bad news—for reputation and advancement, it’s better to be idealistic and then explain later what you got wrong.

So whatever you might think about the consequences of skyrocketing government debt, you should consider that it might be rocketing at a much steeper trajectory than you’re being told.

ORIGINAL SOURCE: 8 Things to Know about Last Week’s CBO Report at FF Wiley on 4/20/18