Creative Statistics Hide US Contraction; Trillion in Debt?

Check out this interview (PDF) with economist John Williams. Hope you're up on your macro. John basically says that some "creative" tweaks made over the past few decades in the way the US reports statistics have caused many measurements to become way too optimistic and misleading. It started in the Kennedy years, with Clinton perhaps the worst offender of the bunch ("surprise"). Some quotes:

Quote:

Real CPI right now is running at about 8%. And the real GDP probably is in contraction. ...The difference that it makes is significant: if the same CPI were used today as was used when Jimmy Carter was President, Social Security checks would be 70% higher.

(CPI is a measure of inflation...more on CPI gaming here)

Quote:

“Well, we really need to define discouraged workers—so if anyone has been discouraged for more than a year, we’re just going to take them out of all the numbers, take them out of the workforce completely”. In doing so, they knocked about 5 million unemployed out of the broader measures of unemployment...But, as I mentioned, if you take out all the funny games that they’ve played with it, unemployment is really up around 12%.
...

They basically reduced the number of people being surveyed in the inner cities, and then claimed they had replaced them statistically. But the effect was immediate: You saw a drop in all the unemployment measures that would normally be influenced by inner-city surveying.

Quote:

We’ve had three years in a row here where the GAAP deficit has been basically $3.5 trillion. So the deficit and the total obligations of the federal government are increasing by roughly the amount of GDP every three years. In fact, the fiscal 2005 statement shows that total federal obligations at the end September were $51 trillion; over four times the level of GDP. It is unprecedented for a major country to have its actual obligations so far out of whack.

Quote:

Now, [GDP]'s still routinely overstated, as I said earlier, by about 3%, so that 1.1% growth was probably close to 2% contraction. Clearly, the consumer doesn’t have the strength to keep this economy pumping at this time.

As "men on the streets" we're apparently supposed to be able to tell what's going on. What's your take on all of this? Are other countries doing the same thing with their statistics? What is the US to do if the deficit is really in the trillions of dollars?

If the guy needs to put out a (pay) newsletter about it, I guess this isn't quite common knowledge. I can just imagine the thought of millions of dollars being invested on these faulty numbers... and, well, it's quite unfortunate.

Jam it back in, in the dark.