(SEATTLE) –In a troubling sign that accounting problems have grown beyond corporate balance sheets, two of the main economic gauges used by Wall Street, banks, and in the calculation of Social Security payments have been found to contain serious math problems.
The problems were identified by examining contents of tables provided by the US Bureau of Labor Statistics, and comparing between December 2001 and December 2002 weightings.
According to the tables, in the energy category, at least two changes in 2002 reduce energy cost weightings in the indices, including one which reduces importance of “fuels and utilities” in the overall index by a whopping ten percent, and another which pushes winter energy cost calculations into summer.(1)
In the education category, the importance of college, elementary tuition, and childcare was reduced between 2001 and 2002.
In the housing category, the weighting of “hotels and motels” was increased (against the backdrop of post-Sept 11th falls in tourism), while at the same time, “housing at school” got less weighting.
Finally, in the most recent table which rates relative cost importance, health insurance is placed below others categories such as “recreational reading materials”, “Pets”, and “Toys.”(1)
These findings are significant because they represent areas where consumers and businesses face real, ever-increasing costs, in contrast to reports recently from the administration claiming a healthy economy and low inflation. Retirees, for example, may have received smaller payments due to these errors, and banks may have made loans where otherwise they should have not.
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