On the 19th of this month Ransom Notes Radio had our featured guest C.A.F.E. economist Mark Skousen on to talk about the government gaming the economic numbers. During the interview Skousen touted his own solution to fuzzy fed math.
Instead of measuring Gross Domestic Product (GDP), we should measure Gross Output (GO), says the head of the Center for Austrian Finance and Economics.
And starting this month the Bureau of Economic Analysis adopted it.
How big of an idea is it?
We'll let's let Steve Forbes tell you in a piece he wrote for Forbes.com:
Why is GO such a big deal? Because it measures the economy in a far more comprehensive and accurate manner. GDP represents the value of all final products and services. It ignores all the steps that go into the making of these things. It’s sort of like looking at a carton of milk and paying no heed to everything that goes into creating that milk and getting the carton onto the store shelf.
Noted economist Mark Skousen has long been pushing for a more accurate way to measure the economy and thus deserves a Nobel for his work on this (and won’t get it, given the politics of the economics profession these days). Skousen is well aware of what GO means. As he wrote on Forbes.com, “Consumer spending is largely the effect, not the cause, of prosperity.”
You can hear the Ransom Notes radio interview right here:
John spoke with economist Mark Skousen about government rigging economic data.