Doug's LBO article: Preposterous economic projections or unstated logic?

Max Sawicky sawicky at
Sat Mar 20 09:05:50 PST 1999

> -----Original Message-----
> From: owner-lbo-talk at
> [mailto:owner-lbo-talk at]On Behalf Of John K. Taber
> Sent: Friday, March 19, 1999 4:38 PM
> To: 'lbo_talk'
> Subject: Doug's LBO article: Preposterous economic projections or
> unstated logic?
> Nobody has commented on Doug's LBO article, "Sloth and discipline".
> I liked it very much but I suspect Doug's thinking hasn't jelled
> yet between dismissing the Social Security Administration's
> economic projections as "preposterously glum" or accepting them
> as having some "unstated logic" that would make them in some
> sense true.
> For the sake of argument, let me assert that they are true to
> see what unstated logic we can find.
> First, the SSA projections do not use past performance. They
> used their demographic projections to figure the size of the
> working population, some unexplained projection of low growth
> in worker's productivity, and some unexplained projection of
> a low immigration rate.
> Second, their projections must have troubled the SSA actuaries
> because they called in outside experts to examine their methods.
> This in approx 1993-1994. Their report is available at
> as am.exe. Download it and execute it to get
> a printout.
> The experts had quibbles, and made the important point that
> there is no chance that any single part of the projections
> can be correct. But, in essence the experts found nothing
> wrong with the SSA methods.
> I take that as a strong endorsement.
> So, can we as an exercise assume that GDP will likely grow
> anemically at about 1.4%, and degrading towards the end of the
> seven decades to 1.2%?
> And can we assume that Dean Baker's projection of equity
> returns will be halved from the historical 7% to 3.5%?
> Where will that leave us?
> And take it from there?
> Suppose that an unstated goal of our leaders *is* a near
> stagnant economy? Is suspecting that so crazy on my part?
> --
> Man kann nicht auf zwei Tänze mit einem Popo tanzen.

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