Understanding what is happening in our $7 trillion economy is essential to making intelligent policy. Much of that understanding depends on good statistics - in particular, correctly reporting changes in employment and prices. But it's a difficult task, best left to professionals at the Bureau of Labor Statistics in the Department of Labor.
Speaker Newt Gingrich thinks he knows better. He is calling for instant action on comments by Federal Reserve Board Chairman Alan Greenspan that the consumer price index may be overstating inflation by between .5 percent and 1.5 percent.
If Mr. Greenspan's higher estimates are right, a truer measure of inflation might save $150 billion over five years by trimming cost-of-living adjustments for Social Security and other benefits, and reducing the amount by which the personal tax exemption automatically adjusts every year.
Mr. Gingrich sees an easy way to finance spending reductions. Claiming that he "has heard" the Bureau of Labor Statistics is dragging its feet on updating the CPI, he said, "We have a handful of bureaucrats who . . . have an error in their calculations. . . . If they can't get it right in the next 30 days . . . we zero them out, we transfer their responsibility to either the Federal Reserve or the Treasury and tell them to get it right. …