Dear boobee,
Thanks for your question. First, let me request that if any of the
following is unclear or if you require any further research – please
don’t hesitate to ask me for a clarification.
You requested a researcher's answer + any web sites that can help
with answering the following question: Why has it become
increasingly difficult for the federal government to monitor economic
activity in the United States?
There are several reasons why it has become increasingly difficult to
monitor economic activity in the US:
1) Difficulty of keeping track of new small businesses - Tremendous
growth in the micro economy – number of individuals self-employed etc.
2) Tax avoidance and evasion – as tax code continues to become more
complex, individuals and corporations are finding more ways to avoid
paying taxes, or to evade taxation all together by locating offshore.
3) Difficulty of measuring the “black” or shadow economy – illegal
activities such as the drug trade, prostitution etc. In the US,
estimates vary – shadow economy estimated at between 4% to 33% of GDP
(but note that US does adjust estimates to account for shadow
economy). This is also known as the “underground economy”
For (1) through (3), please see -
http://countrydata.bvdep.com/EIU/Help/measuringeconomicactivity.htm
http://www.sais-jhu.edu/faculty/Catalan/Work-Website/Lecture1M.pdf
4) Value of leisure not included in GDP, but leisure activities have
been on the increase
5) “Similarly to leisure, many other aspects of life that can yield
utility, sometimes summarized as the “Quality of Living”, are omitted
in GDP. This entails the quality of the environment, social security,
education and so on. All these “soft” factors do not appear in GDP and
therefore hamper the usefulness of GDP as a welfare measure.”
For (4) through (5), please see -
http://www.src.uchicago.edu/~iwern/econ202/doepke/nipa.pdf
6) Value of work done at home – “housewifing” or “home production”
(although this has generally been on the decrease)
Please see -
http://www.greenleft.org.au/back/1998/312/312p28.htm
As well as -
http://www.sais-jhu.edu/faculty/Catalan/Work-Website/Lecture1M.pdf
7) Growth of the services economy – e.g. if I employ a housecleaner
and pay her cash, there is no way to measure this; multiply by ten
million households, and you have a real problem on your hands! This
has been exacerbated by illegal migration from Mexico, now estimated
in the millions.
Please see -
http://mitpress.mit.edu/books/0262523302/UDE/haltiwanger.pdf
8) Tremendous growth in bartering, e.g. –
“A growth in bartering is anticipated. This will be encouraged by easy
access to partners over the
Internet.”
Please see -
http://www.ma.hw.ac.uk/RSE/commerc/seminar_reports/foresight/f13jun00.pdf
“Bartering, the oldest form of commerce, has
maintained a significant presence in society throughout
history. The power of the web and computer-based models
have spurred new growth in bartering.”
Please see -
http://www.inform.umd.edu/UMCP_Today/Important_Notices/FYI/archive/2000.11/2000.11.15.html#3
This was a very interesting question to answer, truly enjoyed it! I
hope this response adequately addresses your request. Please let me
know if you are in need of additional information concerning this
query.
Thanks,
ragingacademic-ga
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