In October 2009, Greece faced a political shift as the PASOK Party won a decisive victory, bringing George Papaconstantinou into the role of finance minister. At the time, he had little awareness of the economic turmoil awaiting him. It soon became evident that the prior administration had concealed the true state of the nation’s finances, presenting a budget deficit of just 2 percent of GDP to European partners. In reality, the shortfall was closer to 12 percent, later revised to 15 percent—more than five times the European Union’s limit.
This revelation triggered a crisis. The public learned that austerity measures—spending cuts and tax increases—were unavoidable. The resulting reforms led to widespread unrest, with violent protests erupting across the country. Greece’s economy contracted by roughly 25 percent, and unemployment soared past 25 percent. Recovery took years, and the damage to the country’s credibility was profound. As Papaconstantinou noted, once trust in official statistics is lost, it takes a long time to restore. The phrase “Greek statistics” became a mocking shorthand across Europe.
A similar erosion of confidence occurred in Argentina around 2006. Facing inflation and ineffective price controls, the government targeted its statistical agency, removing key personnel under the guise of improving methodology. Over time, official inflation figures diverged sharply from reality. Alberto Cavallo, an economist at Harvard Business School who grew up in Argentina, began collecting his own data from major supermarkets. He found inflation rates two to three times higher than the government claimed.
As discrepancies grew, both citizens and international investors lost faith in Argentina’s economic reporting. The government responded by printing more money, fueling further inflation. Without reliable data, fiscal credibility collapsed.
Today, concerns are emerging in the United States. After President Trump dismissed the head of the Bureau of Labor Statistics over dissatisfaction with employment reports, experts like Cavallo see troubling echoes of Argentina’s past. However, he remains cautious, noting that the U.S. has strong institutional safeguards. The BLS is widely respected for its independence and technical rigor, and internal staff are likely to resist any attempts at manipulation.
Still, warning signs exist. If official data releases are suspended or consistently diverge from private-sector estimates, confidence could erode. Amy O’Hara, a former U.S. Census Bureau official now at Georgetown University, warns that halting data production would be catastrophic. She likens the statistical system to a factory: without raw inputs, no reliable indicators emerge. Worse, she fears a scenario where numbers are fabricated—not derived from evidence—but presented as fact.
O’Hara acknowledges room for improvement in how data is collected and shared. But she urges investment in better methods rather than blaming individuals. While there’s no evidence yet of data tampering in the U.S., the perception of political interference could weaken public trust in institutions that have operated for over a century.
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What happens when no one trusts a country’s economic data
Geoff Bennett: n nAs we just reported, inflation in the U.S. picked up last month. The Labor Department ‘s report was delayed over a week due to the government shutdown. And the White House said today there will likely be no inflation report next month. The shutdown has also halted the release of monthly jobs numbers. n nBut even before the shutdown, experts were sounding the alarm about risks to government data. That ‘s after President Trump fired the head of the Bureau of Labor Statistics, angry about the employment numbers. n nOur William Brangham has this report with lessons from nations where trust in government data was lost. n nWilliam Brangham: n nIt ‘s October 2009. The streets of Athens are buzzing after Greece ‘s parliamentary election. The opposition PASOK Party had won a landslide. A new prime minister took office. n nAnd George Papaconstantinou became the new minister of finance. n nGeorge Papaconstantinou, Former Greek Finance Minister: n nWhen you are asked to serve, you serve. n nWilliam Brangham: n nBut Papaconstantinou had little idea of the mess he was inheriting. n nGeorge Papaconstantinou: n nIt was clear that Greece was, let ‘s say, living beyond its means. The government thought that, rather than dealing with the runaway fiscal deficit, it would be best to not exactly portray the situation as it was and to send to our European partners data which showed the deficit significantly lower. n nWilliam Brangham: n nThe year before, at the end of 2008, the previous administration had projected its budget deficit would be around 2 percent of the nation ‘s GDP. After Papaconstantinou ‘s party took office, the government revealed what had been hidden. The deficit was actually 12 percent and later revised up to 15, more than five times the limit set by the European Union. n nGeorge Papaconstantinou: n nSuddenly, you have a big problem, and you have to explain to Greek citizens that you need to deal with this problem. And dealing with a runaway deficit means some degree of austerity, means reducing expenditures, increasing taxes. n nWilliam Brangham: n nThe government implemented sharp spending cuts and needed a massive bailout from the E.U. Greeks took to the streets in the thousands. Multiple people died during violent riots and clashes with police. n nUltimately, Greece suffered enormously, losing about a quarter of its GDP, while unemployment eclipsed 25 percent. It would take years for the country to recover. n nGeorge Papaconstantinou: n nTrust is lost almost overnight, and it takes years to bring it back, because you are basically telling the world that you will manipulate the data for political means. It is the country as a whole that gets a bad name. And very quickly, the shortest joke around European capital was Greek statistics. n nWilliam Brangham: n nBefore Greece ‘s crisis, Argentina experienced its own number-fudging scandal. Around 2006, Argentinean policies had resulted in high government spending. The country ‘s economy ran hot, inflation rose, and price controls didn ‘t work. n nSo Argentina ‘s president turned his attention to the national statistics agency, eventually firing a key official. Argentinean-born Alberto Cavallo teaches at the Harvard Business School. n nAlberto Cavallo, Professor of Business Administration, Harvard Business School: At the time, it was not obvious that there was going to be manipulation, because the president said, we just don ‘t think the data is being constructed correctly, and we ‘re going to improve the methods, we ‘re going to put people in place who will do this better. n nWilliam Brangham: n nAt first, the government stopped publishing certain numbers. Then, when numbers did come out, they appeared detached from reality. n nSo, Cavallo, who was a Ph.D. Student in the U.S. at the time, started doing some digging. n nAlberto Cavallo: n nI decided I would try to collect data online from the largest supermarkets in the country, and I pretty soon realized that the numbers I was getting were two or three times higher than the official numbers for inflation. n nWilliam Brangham: n nAs the real data became clearer, both regular Argentineans and global investors lost trust in the country ‘s economic numbers. n nAlberto Cavallo: n nIt became very hard for the government to finance itself. And they started relying more on printing money, which led to even more inflation. n nWilliam Brangham: n nThis summer, after President Trump fired the director of the Bureau of Labor Statistics, the BLS, saying he was unhappy with the agency ‘s job reports, Cavallo saw some parallels to Argentina, but also some key differences. n nAlberto Cavallo: n nThere ‘s no evidence yet of any manipulation of the data in the U.S., so I ‘m hopeful this will not happen. I honestly think it would be much harder to do here in the U.S. There are a lot more checks and balances. The BLS is considered one of the best statistical agencies in the world. They have a lot of staff, highly qualified staff still that would probably raise flags. n nWilliam Brangham: n nHere ‘s what Cavallo says would be a real warning sign, if the government stops putting out data sets altogether, or if the numbers don ‘t roughly match private sector estimates. n nResearchers like Amy O ‘Hara are watching closely for those signals. O ‘Hara was a senior official at the U.S. Census Bureau and is now an expert on public data at Georgetown University. n nAmy O’Hara, Georgetown University: n nRight now, you can think of it as a numbers factory and the raw materials come in and these indicators come out. The absence of that would be, I fear, one of two things. One, no numbers come out, and that would be devastating because we would lose the signal to understand what ‘s going on in the country. n nAnd the other thing I would fear is that you don ‘t have the factory running and you have the equivalent of a writers room. You have people that just make up the numbers and then tell people that this is what happened. n nWilliam Brangham: n nO ‘Hara acknowledges that the government ‘s data collection and its dissemination can always be improved. n nAmy O’Hara: n nI think that we do have something of an opportunity here to say, OK, well, if we ‘re worried about these numbers, great, put more money into improving the measures without scapegoating any individuals. n nWilliam Brangham: n nO ‘Hara too hopes the U.S. doesn ‘t follow the paths of Greece or Argentina. But she fears some of the trust in America ‘s statistical agencies, which have collected data for over a century, may already be shaken. nFor the “PBS News Hour,” I ‘m William Brangham.