Reuters reports on a growing movement among governmental and private groups across the globe, that is gaining special traction within the US government, to rethink and improve on traditional economic indicators. The article reports on two central critiques of current data management. One is that governments spend too little on data collection and as a result are unprepared to meet the challenges they face. The report notes that the Federal Reserve had little data on the complex financial instruments whose failures contributed to the recent financial crisis. Similarly, unemployment estimates turned out to be under-counting those actually unemployed by 1.2 million people early in President Obama's term because of a modeling difficulty. The Congressional Budget Office once misforcasted a budget by 100 billion dollars. More substantively, the forty-five-year-old poverty measurements are acknowledged by both left and right to be obsolete, yet they are still used to determine eligibility for some federal programs.
A second, perhaps more serious problem haunts economic data, argues Reuters, one which cannot be fixed by a few million more dollars spent on data collection. A growing chorus, lead by the Sarkozy Commission, set up by the French President, suggests that Gross Domestic Product, traditionally seen as the top-line measure of economic success, is quite flawed. Criticisms range from the fact that the statistic, first coined in 1934 is out of date, to the fact that it does not including unpaid work (such as homemaking in developed countries), to the contention that well-being has little to do with the size of a paycheck. Most acknowledge these criticisms, yet many harbor doubts about improved measures of development. "Money cannot buy happiness, and GDP cannot measure it" admits one conservative, but it remains superior to "someone's subjective decision about how you should measure your happiness."