Privatization Pep Rally

[Max Sawicky]

>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.

It remains for us to explain why we'll get
to 2.5, and why the arguments that we won't
get there are wrong.

There is obvious inconsistency in the other
side's propaganda.  The virtue of the 'official
story' is that the same wonks who give us the
1.4 growth rate are writing stuff discounting
the returns to privatization, since their
gloom is consistent.  The General Accounting
Office, Congressional Research Service, and
I believe the Congressional Budget Office have
all put out wet-blanket studies of privatization.

The only variant which is an unmitigated
gainer is having the trust fund own financial
assets with higher returns than those credited
to the bonds it holds.  Granted this is a
slippery political slope, since under such
a regime (which I would only endorse as a
last ditch resort) there would be pressure
to distribute the assets to direct individual
ownership.  Note that in all variations I've
seen, this aggregate option does not fix the
presumed shortfall entirely.

MBS


>Doug
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