Government's Misrepresentation of Economic Status

A research paper titled "Recession Since 2022: US Economic Income and Output Have Fallen Overall for Four Years" by Dr. E.J. Antoni, a research fellow at the Heritage Foundation, and Dr. Peter St. Onge, a fellow with the Mises Institute, suggests that the government's economic figures are distorting the truth about the economy. This comes as a surprise to many, as the economy is often a top concern for American voters, despite official government statistics indicating low unemployment and declining price inflation.

Questioning the Government's Economic Data

The research paper by Dr. Antoni and Dr. St. Onge details how the federal government understates inflation, while making wages, profits, and economic growth appear stronger. They utilize a more accurate measure of inflation than that used by the government to uncover the true state of the economy. Their calculations reveal that the US economy has been in recession since 2022.

Distorted Figures?

According to the government, the Gross Domestic Product (GDP) increased by approximately 13.7 percent from 2019 through the first half of 2024. However, when using a more accurate inflation number, there is a 2.5 percent decline in GDP. Similarly, the government's figures show that Americans' disposable income increased by 12.9 percent from 2019 through the first half of 2024. But, when a more accurate way of calculating price inflation is used, it shows a decline of 2.3 percent.

Government Manipulation of Data

John Williams’s ShadowStats has regularly shown how government manipulates data to underreport unemployment and price inflation. These distortions mislead the public, Congress, the president, and possibly even the Federal Reserve about the true state of the economy. This can lead to economic policy decisions that ignore the dangers posed by Congress's refusal to cut federal spending.

Impact of Government Spending

Government spending puts pressure on the Federal Reserve to keep interest rates low. The Federal Reserve can maintain low interest rates because the dollar's world reserve currency status guarantees a strong demand for US dollars. However, a growing number of countries are seeking alternatives to the dollar, partly due to resentment over the US government's use of the dollar's world reserve currency status to enforce its demands.

Shift Away from the Dollar

Saudi Arabia, for instance, is moving away from exclusively using dollars for its oil trade. The "petrodollar" plays a significant role in maintaining the dollar's world reserve currency status. If the dollar loses this status, America could face a major economic crisis that could lead to the collapse of the welfare-warfare state and the fiat money system.

Bottom Line

The potential collapse could result in a shift towards respect for the principles of liberty, limited government, free markets, and a foreign policy of peace and free trade. However, it could also lead to an even worse situation if a frightened populace turns toward an authoritarian promise of security in exchange for restriction of liberty. Therefore, it is essential for those who know the truth to continue educating others about the benefits of liberty. What are your thoughts on this matter? Do you believe the government is distorting economic figures? Share this article with your friends and discuss. Don't forget to sign up for the Daily Briefing, available every day at 6pm.