On Turning 60 (Postscript)

Commentator Rodger doesn’t believe we can grow our way out of the pending Social Security crisis, but I think he’s (almost) wrong. Look, I was a trustee of the Social Security trust fund. I saw up close how the actuaries made their projections for when the fund will run out of gas. They plugged in (and continue to plug in) very low estimates of average annual economic growth over the next seven decades. But if the U.S. economy grows anywhere close to its average growth over the LAST seven decades – which is over 3 percent a year – the trust fund will do just fine. How can we grow that fast when we won’t have enough new entries into the labor force to support the vast baby-boom generation? Two ways: First, productivity gains will be substantial, as new technologies work their way through the economy (consider the astounding productivity gains what’s over the last five years). Second, America will continue to have lots of legal and illegal immigration, despite whatever Washington does in the meantime. So don’t worry too much about Social Security. Fix your worried gaze at Medicare instead. There’s the real problem.