In a previous blog, I mentioned how I did not have much faith in the economic growth projections during the first quarter of this year. Unlike the start of second quarter where job growth has tapered off, we started to see fairly significant job growth during the early part of this year. Despite that improvement, economic growth was surprisingly slow at 2.2% of real gross domestic product. I mentioned that I would not be surprised if those economic figures are upgraded in the future.
In the May 3rd, 2012 issue of the Bloomberg Businessweek, their Global Economics section highlights the problems plaguing the federal government agencies. When looking at ways to cut government spending, Congress finds it easier to cut areas where lobbying is not as extensive. However, they do not understand the implications of their decisions.
Since the 1990s, Congress has consistently denied extra funding for the U.S. Census Bureau until recently, who wanted to examine the services sector in more detail. During that time, our economy went through a transformation where manufacturing jobs became less prevalent and were replaced with jobs in services. By not being able to access data on a timely basis, some experts attribute that lack of information in economists not being able to fully anticipate and understand the financial crisis that wrecked our economy.
Rather than make tough decisions on national security and entitlement spending, Congress is proving the axiom of being “penny wise and pound foolish”. When looking at public debt approaching $16 trillion, savings of $8 million is paltry. If economists are not armed with accurate and timely data, the end result is more misery for Americans.