Thursday, March 10, 2011

BWR on Rep. Ryan's Social Security claim.

From our friends at Bretton Woods Research.

Recommend Reading: Social Security Needs Growth, Not Cuts

By Louis Woodhill may be found here.

Louis Woodhill, supply-sider and member of the Club for Growth's Leadership Council, discusses U.S. economic growth in relation to Social Security solvency in Forbes. Between 1998 and 2003 the projected 'doomsday' date -- the year when Social Security outlays would exceed dedicated payroll tax revenues -- kept moving forward at 15 years out. How was it possible that the doomsday date simply moved ahead with each year? Quite simply, the U.S. economy grew during that period and averaged about 3.2% annually. The obvious deduction is that if a 3.2% growth rate is sufficient to indefinitely postpone a 'doomsday' scenario by the Social Security Trustees, a 3.5% growth rate, contrary to Paul Ryan's contention, would likely increase the doomsday timeline or "cushion". Bottom line: growth is part of the solution to the Social Security question, we just need Congress to focus on optimizing it by advocating pro-growth tax policies and a stronger dollar. Politically unpopular benefit cuts and increases in the retirement age are suboptimal for the GOP and the American people.

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