Misleading With Numbers: It’s Worse When the Government Does It
The comments above & below is an edited and abridged synopsis of an article by Gary M. Galles
Examples of political abuse of numbers are abundant.
“One of the most common misrepresentations of the costs of government spending is ignoring what economists call the excess burden of taxation. In addition to the resources taken from citizens to fund spending, tax wedges between what buyers pay and what sellers receive destroy productive trades and the gains they create. A 20% tax would destroy those trades generating less than $1.20 in value per dollar spent; raising it to 30% would also destroy trades generating between $1.20 and $1.30 in value per dollar spent. In 2006, Martin Feldstein estimated the excess burden at 76 cents per dollar of added tax revenue. This estimate (not the highest proposed) means one more dollar of government spending would cost society $1.76. That is, every dollar of additional government spending would have to generate more than $1.76 in benefits to even conceivably improve Americans’ general welfare. But I have never seen an official government project evaluation that included those costs.”
Galles discusses deception when it comes to government trust funds, unfunded liabilities in the Social Security and Medicare programs, benefit cost analysis, and Obamacare.