Public opinion polls consistently show that the economy is one of the top, if not the top, issue for American voters. This may seem odd to some, as official government statistics show low unemployment and falling price inflation, suggesting the Federal Reserve has engineered a “soft landing” that reduces inflation without causing a recession. So why the concern over the economy? One reason is that more people are realizing that government economic numbers hide the truth about the economy.

“2022 Recession: US Incomes and Economic Output Broadly Falling for Four Years” is a Brownstone Institute research paper by Heritage Foundation Research Fellow Dr. EJ Antoni and Dr. Peter St. Onge, member of Mises. Institute. It details how the federal government is underestimating inflation while wages, profits and economic growth appear stronger.

Dr. Antoni and Dr. St. The Onge use a more accurate measure of inflation than the one used by the government to discover the true state of the economy. Their calculations show that the US economy has been in recession since 2022. The government claims that Gross Domestic Product (GDP) grew by about 13.7% from 2019 to the first half of 2024. When a more accurate inflation number is used, the result is a 2.5% drop in GDP.

Federal government figures also show that the disposable income of the American people increased by 12.9 percent from 2019 to the first half of 2024. However, when the more accurate way of calculating price inflation is used, this shows that Americans’ disposable income fell by 2.3 percent. Dr. Antoni and Dr. St. Onge is hardly the first to expose how the government uses falsified statistics to make the economy appear stronger. John Williams’ ShadowStats has regularly shown how the government manipulates data to underreport unemployment and price inflation.

Government distortions of economic data mislead people about the true state of the economy. They also mislead Congress, the president, and perhaps even the Federal Reserve. Until the “Audit the Fed” bill becomes law, we won’t know for sure what data the central bank is relying on. Making economic policy decisions based on flawed data allows politicians to ignore the dangers posed by Congress’s refusal to cut federal spending.

Government spending puts pressure on the Federal Reserve to keep interest rates low. The Federal Reserve can keep interest rates low because the dollar’s status as the world’s reserve currency guarantees strong demand for US dollars. However, a growing number of countries are looking for alternatives to the dollar. One reason for this is resentment over the US government’s use of the dollar’s world reserve currency status to force other counties to comply with US demands. Saudi Arabia is moving away from exclusively using dollars for oil trade. The “petrodollar” is a major reason why the dollar has been able to maintain its status as the world’s reserve currency.

If the dollar loses its status as the world’s reserve currency, America would face a major economic crisis. This crisis could lead to the collapse of the social warfare state and the fiat monetary system that makes it possible. The danger is that the replacement could be even worse, as a frightened populace turns to an authoritarian promise of security in exchange for the curtailment of freedom. However, the collapse could also lead to a return to adherence to the principles of liberty, limited government, free markets, and a foreign policy of peace and free trade. Those who know the truth must continue to educate our fellow citizens about the benefits of freedom.