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By Phil Piemonte

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Ah, yes—statistics!

We all know the maxim (variously attributed to about six different people) that “there are lies, damned lies and statistics.”

Well, we’re all going to be hearing plenty of statistics as this Congress winds to a close and the next one fires up. Both parties cite a lot of them—very often out of context—to support their arguments. A lot of the statistics bouncing around lately have been related to the cost of keeping you on the payroll.

Some people might be surprised to learn that decent journalism schools (they have vanished in favor of “communications” programs) used to require students to take statistics courses with names like “Survey and Experimental Design.” The rationale was that if students had a basic understanding of how this stuff worked, they would resist the impulse to take statistics at face value. They would look behind the numbers.

Or, as one professor in our acquaintance—a former newsman with the Australian Broadcasting Corp.—used to say: “Any mug can come up with a number. The question is: What does it mean?

Here’s a sample exercise he would have liked:

In recent days, one of the parties made this compelling statement: “Today, Washington spends $7 million every minute of every hour of every day. That is twice as much as was spent per minute in 1980.”

That set off our “mug” sensors. So we did a quick Web search and found a cool site created by some college professors—it’s called MeasuringWorth.com.

The site says that measuring worth is a complicated question, and that comparisons over time depend on many variables, including context. Having provided those caveats, the site offers a lot of calculators, including one that will figure out the relative purchasing power of a U.S. dollar for any stretch of years from 1774 to 2009.

So we entered the range 1980 to 2009 (the last year covered by the calculator). According to the calculator—in constant dollars—it took $2.60 in 2009 to buy what $1.00 bought in 1980.

If this is correct (and we suspect it is pretty close, if only judging from our own memories of what various things cost in 1980)—this means that if the government is now spending only $2.00—not $2.60—for every $1.00 it spent in 1980, it’s actually spending less today in constant dollars.

Is it true? Who knows? As we have noted, any mug can come up with a number.

Moral: As the parties feud—over federal jobs, and everything else under the sun—and the statistics continue to fly, take a deep breath. And try to look behind the numbers.

Posted by Phil Piemonte on Sep 24, 2010 at 12:13 PM


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