The front page of the Wall Street Journal on March 3rd has an article “Europe’s Original Sin”. The subtitle of National Leaders ignored Greece’s soaring debt for years leads a discussion of how governments ignored sticking out their balance sheet and coughing about Greece and possibly themselves. 

The gentler version on the other countries in the article describes this as Fuzzy Numbers and restatements of prior years.

Some of you are thinking why should you care. After all expectations of politicians are pretty low and government bureaucrats who report to politicians may be lower.

To the extent that this allows politicians to avoid making hard choices on overspending, this also increases the amount of debts they run up and look around someday for you to pay.  After all, it appears that someday is getting here sooner than most people thought.

Also how much harder is it to create the economic framework you use for making your business decisions when you are not sure which economic data from the government can be trusted. After all if they only fudge the numbers or cook the books on some indexes, that should mean most of the indexes are truthful.  Unless they fudge a little on everything or cook the books on the numbers that are relevant to you. How do you know which ones are accurate and which ones have become Fuzzy?

For those with low opinions of politicians who may be feeling a little proud, think about these two points in closing: 1. When you cook the books even as “little” as they are now admitting they did, you get sued or go to jail. 2. Where are over optimistic assumptions or cutting the corners fudging your books that you have not faced up to?