Here’s American Prospect editor and all-star liberal Robert Kuttner, November 2003 in “Stunted Growth: Why Bush’s policies make economic recovery unsustainable”:
Sooner or later, these deficits will lead to higher interest rates as public borrowing starts competing with private demand for capital. And those higher rates will choke off the consumer borrowing and spending that has been the other engine of recovery.Kuttner, Sept. 2004:
The tax cuts didn't create jobs. No Child Left Behind is big government without the resources. The deficit will sandbag the economy for decades. The Medicare drug plan is a fake. Privatizing Social Security will leave retirees worse off.Kuttner, today, in “What Social Security crisis?”
For years, the Social Security Trustees have used very conservative assumptions about future rates of economic growth, productivity growth, and growth of the labor force. These assumptions, in turn, affect the projected payroll tax collections that will fund Social Security payouts.No need to reform Social Security: the expanding economy will supply revenues as far as the eye can see! You heard it here first, folks.
Five years ago, in the late 1990s, they estimated the long-term economic growth rate at just 1.7 percent. The reality has been well over 3 percent.
Most economists now believe the economy can do a lot better than 1.7 percent annual growth. In its 1997 report, the trustees projected that the system would no longer be able to meet all its obligations by 2029. Just six years later in 2003, based on their acknowledgement of stronger economic growth, the trustees moved the crisis date back to 2042. So if the system can gain 13 years of life in six years, there's not much of a crisis.
But that's just the beginning. In June, the bipartisan Congressional Budget office used more realistic assumptions about economic growth. CBO puts the first shortfall year at 2052, not 2042, and it projects Social Security's 75-year shortfall at only about four-10ths of one percent of gross domestic product. Currently, that's about $40 billion a year, or one-fifth of the revenues that the Bush administration gave up in tax cuts for the wealthy.