Well into the Internet age, the U.S. Census Bureau insists that pencil and paper remains the best way to collect data on American households. According to a new paper by the Information Technology & Innovation Foundation, a planned 2010 e-census form was canceled because the government was worried about security.

A tiny number of Americans — 0.07 percent of census respondents — actually submitted their information via Internet in 2000. And 94 percent of those respondents said they were satisfied with the process.

The bureau won’t offer the online option in 2010. It has cited security concerns, but the ITIF says that reasoning doesn’t hold water:

In terms of data security, it should be noted that all census records are eventually stored electronically, regardless of how they are collected. The security of the census data while in storage is not affected by the manner in which the census data are collected. Internet-based data collection affects the security of the data only while the data are in transit. If strong encryption and authentication methods are used, sending data over the Internet can be more secure than sending a census questionnaire through the mail.

Meanwhile, countries such as Canada and Singapore have successfully used the Internet to conduct censuses. And the cost of doing things the old way is going up rapidly: Conducting the 2010 census will cost $73.21 per household, up from $38.97 in 2000. Study author Daniel Castro calculates that the government could save $27.9 million in paper-processing costs even if just 10 percent of forms were filled out online.

That kind of logic seems like a no-brainer to almost any private business. But the Census Bureau claims, incredibly, that old-fashioned paper forms will be cheaper. Maybe in 2020 it will save us even more money and use abacuses to tally the forms.