Now consider the following graph that includes the SS forecast for GDP over the next 75 years.
This is the same data as above. Notice that the red line is the 1930-2010 GDP. It now looks flatter than a pancake. That is what happens when 5% growth forecasts are used. GDP will grow from ~$15T today to 528T. It will grow non-stop by 3,600%. At the end of the period it will take only ten days to produce our current GDP. Now that is a success story. And if you believe that, I have a bridge for you.
The Fund also forecasts “real” GDP. Here are their numbers:
Two observations. First note the “happy” comeback in GDP for 2011-14. This is wishful thinking. It is also a critical assumption. When the first few years of a 75-year analysis is “missed” it substantially impacts the results all the way out to the 75th year.
The second is that the Fund is using a real growth rate for all of the 75 years that is greater than 2.1%. I have no idea if that is reasonable. I found this on the topic from the CRS. This paper suggests that a growth rate of GDP above 1.8% is not in our history. What does .3% (^17%) mean over 75 years? Trillions.
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Thanks for calling "bs" on these projections, BK. Fortunately, you will be ignored. I say that with all due respect. Think of it this way--the system is unsustainable in the long run even with tax increases, so why bother pretending we can make it better with tax increases. Isn't it far easier to use rosy projections to make people believe in SS? Sure, we're fooling ourselves, but the use of fiat money is an exercise in fooling ourselves. Why single out SS to be honest about, and take more of my current resources to pretend that it can work?
ReplyDeleteThis sounds like the height of cynicism, but really, given the choice between raising my taxes today and using rosy projections, who would choose the former? Truth isn't all it's cracked up to be.