Information is a public good so there is some justification for government supplying it but the recent budget deficit is being used to cut back on data collection. Here is Exhibit #1. You will see that I signed this letter requesting that funds for EIA data collection continue. Here is Exhibit #2. This bill would end the American Community Survey that in recent years took the place of the Census Long Form. The Census Long form (filled out by 1 in 6 households each decade) has been crucial for social science research. If you don't believe me, take a look at the IPUMS data base. Exhibit #3 comes from the proposal that the NSF be banned from financing political science research.
The net effect of this effort will be to undermine basic social science. Researchers who work with private companies such as Google or Facebook or Amazon willl be able to access such confidential data but a series of privacy issues will arise. Such research can be great but there are a limited set of questions would can answer with such data.
Another dangerous effect of the government pulling out of data collection is that the "democracy of scholars" will be threatened. Today in development economics, rich schools with famous scholars such as MIT and Yale have ongoing data collection efforts in which randomized control trials are implemented in various nations. This is a great research agenda but you have to be part of their "network" to be able to access such data. If you are not part of the network, then there will be very high barriers to enter the field. In a world without public data collection, personal connections to firms and non-profits will play an increasingly important role for determining who has access to great data.
In fairness to these groups, I know that MIT and Yale's researchers have open competitions where they invite outside researchers to propose experiments and offer seed money for financing them.
In the absence of government data, how will we know what are the aggregate trends taking place with respect to income inequality, unemployment, poverty? How will people sample a subset of the population? Using Facebook? A cynic might say that some Republicans seeks to increase general ignorance among the population so that the status quo can continue. I hope this claim is wrong.
Now, there is one piece of data that will continue to be in the public domain. That is asset pricing data! Each day, you can look up the price of every public company around the world. An unintended consequence of the demise of government data collection will be a sharp increase in the supply of bad finance papers! Think about that.
