Who's Lying About Personal Spending?

[Pat K]

Who's Lying About Personal Spending?

Here are your possibilities:

    * The BEA is lying.  In the third quarter they claim that PCE changed +0.2, +1.4, and -0.6% for July, August and September, respectively, leading to an aggregate change of +1.2%.

    * Business that remit sales tax are lying. The overall sales tax collections in the 3rd quarter were down 8.2% from last year's levels, and this is the fourth quarter in a row that year-over-year declines were posted.

One of these two reports is a lie.

One is a count of actual monies remitted by businesses in satisfaction of taxes collected by them from real consumers processing real retail transactions (that's the spending that matters in the real economy, right?)

The other, if you read the BEA methodology papers, has the word estimate peppered liberally throughout.

Which do you believe?

Do you believe that retailers are intentionally under-reporting and under-paying sales taxes?

Or do you believe the BEA's "estimates" are complete horsecrap and that the government is intentionally overstating economic activity?

When you have two radically different claims of measurement of the same activity (in this case consumer spending) that are impossible to reconcile within reasonable "measurement error" the conclusion one is forced to reach is that one of the two reports is false.

When faced with such a conundrum it is my contention that the default position is that the purported actual count is the one you trust, and the one that contains "estimates" is presumed to be "cooked" until and unless proved otherwise.
Facebook Who's Lying About Personal Spending?

http://market-ticker.denninger.net/

[WithoutAPaddle]

In the opening post, a blogger named Denninger, whose resume includes no mention of any education in finance or economics and no employment history in which someone paid him for his economic analysis, says that Commerce Department's Bureau of Economic Accounts, October 30, 2009 report of the most current (third) quarter's month-by-month sales figures - showing a net increase over that interval of 1.2% - is inconsistent with another report, by the Rockefeller Institute, reporting that sales in that quarter were 8.2% lower than they had been in the same quarter in 2008 and that, therefore, someone is "lying", which is to say, someone has knowingly published false economic data.

I don't see it.  If sales in June of 2009 were about 8.8% less than they had been in June of 2008, and if they then went up 1.2% over the third quarter of 2009, then the gross sales, and the proportionate sales tax revenue, would be about 8.2% less than it had been in 2008.   The two reports are not transparently contradictory.

[Pat McCotter]

Lies, damned lies, and statistics.

[Puke]

Lies, damned lies, and statistics.

Attributed to Mark Twain! 

[Pat McCotter]

Lies, damned lies, and statistics.

Attributed to Mark Twain! 

Who attributed it to Benjamin Disraeli!

[WithoutAPaddle]

All sage remarks of uncertain origin eventually get attributed to Mark Twain or Will Rogers.

All idiotinc remarks may be attributed to Yogi Berra.

"It gets late early out there."

[KBCraig]

Lies, damned lies, and statistics.

"The government are very keen on statistics.  They collect them, add them, raise them to the nth power, take the cube root and prepare wonderful diagrams.  But you must never forget that every one of these figures comes in the first instance from the village watchman, who just puts down what he damn pleases."
-- Sir Josiah Stamp, Inland Revenue Department (England) 1896-1919

[DC]

In the opening post, a blogger named Denninger, whose resume includes no mention of any education in finance or economics and no employment history in which someone paid him for his economic analysis, .

People actually do pay him for his analysis. He has a forum also where he has 66,000 post last I saw. He has a gold section that you have to pay $20 a month to read. I think he makes most of his his money trading and not from the the forum. Before that I think he was a computer programer and owned a business of some kind. 

[KBCraig]

Wow, where you been, DC?

[cathleeninnh]

Some consumption spending is not taxable.

[DC]

Wow, where you been, DC?

I am in Tennessee. I will be going to Florida in a few months.