Measuring the Economy May Not Be as Simple as 1, 2, 3
The Census Bureau tomorrow will release the latest statistics on poverty in the United States, the income level of an average household and the number of Americans still lacking health insurance.</br></br>A growing chorus of experts and politicians is raising questions about the data that frame Americans' understanding of their nation's well-being. From poverty levels to health insurance, inflation to personal savings, widely accepted statistics are overstating some problems and understating others, miscounting people, and sending policymakers down blind alleys.</br></br>"We're getting at best an impressionistic sense of what's going on in the economy," said Rep. Rahm Emanuel (D-Ill.), who recently introduced legislation to establish an independent commission aimed at overhauling government economic statistics. "Major policy decisions are being made based on data that is inadequate to the task."</br></br>This seemingly technical problem has real-world consequences, allocating federal assistance to some who don't need it while cutting off others who do, raising the costs of programs like Social Security, or pushing policies for problems that may not exist.</br></br>For example, since poverty levels are not adjusted for regional costs of living, the working poor in expensive urban centers like Washington are routinely excluded from federal programs because their income lifts them above the official poverty line. The rural poor in low-cost states like Arkansas often can afford considerably higher standards of living than their urban compatriots. Yet they may be eligible for food stamps, housing aid, free school lunches and other programs that exclude the urbanites.