Friday, March 10, 2017

Cutting Spending on Statistics Won’t Save the Budget

From PacificStandard:

Last week, the Trump administration announced it would seek dramatic spending cuts across a number of agencies in order to pay for a $54 billion increase in defense spending. That will be tough to accomplish: The bulk of the federal government’s budget goes to Social Security, Medicare, and defense spending, all of which the president has vowed to leave untouched. The administration has specifically said it would target the Environmental Protection Agency and “foreign aid,” both of which constitute a very small proportion of the federal budget. But elsewhere in Washington, D.C., researchers are worried that another category of government spending is also vulnerable: spending on statistics and data.

Donald Trump’s hostility toward official economic data is especially well-known. His casual comments about the official unemployment rate being “phony” have pained economists for months, and researchers have worried that the administration might seek to either stop collecting necessary data altogether, or might direct agencies to skew data in a manner that supports certain policies or claims. Last month, the Wall Street Journal reported that the administration was already floating the idea of changing the way the government calculates trade deficits, with a revised methodology that would make trade gaps look bigger—a change that would presumably bolster support for Trump’s assertion that the country’s trade policies and agreements need to be renegotiated or changed.

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