Privatization Pep Rally

Doug Henwood dhenwood at
Wed Jul 29 10:52:06 PDT 1998

James Baird wrote:

>If you don't think it's biased, I'm afraid you aren't reading it closely
>enough. Doug has done some excellent analysis of this, so I'll let him
>fill in the details. The basic point, though, is that in order to get
>their conclusion that the system is going broke, the trustees assume
>economic growth for the the next few decades at sub-Depression levels.

Yes. I haven't read their latest, but last year's report had a 1.4% average growth rate for the next 75 years, lower than the 1930-40 growth rate. At 2.5%, the funding problem disappears. Privatizers never explain how the stock market could continue to return 7-10% a year with the economy growing at 1.4%. I suppose the profit share of GDP could rise to 100%, but that might bring about a little realization crisis.


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