Bush: A Nattering Nabob of Negativism

I missed this WaPo article on Friday, but it makes some excellent points. First off, it contrasts Bush's vaunted message of optimism about the future with his scaremongering on Social Security. Most notable is the fact that while he postulates economic growth as a result of his policies, he bases the SS "crisis" on his pessimistic vision that "a rising tide of retiring baby boomers will inevitably slow economic growth and bankrupt Social Security." In short, he can't make up his mind whether he's a prattling poltroon of positivism, or a nattering nabob of negativism.

There's plenty of evidence that he's the latter, at least as far as our futures are concerned. Needless to say, Bush's own economic future looks about as bright as you'd expect for someone who's looting taxpayer money for the benefit of himself and his friends. Bush's mixed message for America may boil down to something as simple as "I've got mine and yours, and you can go to hell."

If I understand Bush's vision of the future, his tax cuts will stimulate growth, but retiring baby boomers will nonetheless hobble growth and destroy Social Security. This means that we need to privatize SS to a certain extent, and tie it to stock-market performance, which will generate profits based on economic growth...the very growth that Bush says will be crippled by retiring baby boomers.

[T]hose projections are based on a dire view of the nation's economic future, one in which the growth in economic productivity crashes from the 3.4 percent rate of last year to 1.6 percent from 2012 on. Economic growth is anticipated to be cut nearly in half from historic trends, to 1.8 percent between 2015 and 2080.

We've been growing by more than three percent since the Civil War, so a 68-year run of economic slowdown sounds to me like a less than ideal scenario for the stock market.

And that's precisely the complaint that sensible economists have with Bush's projections: you don't get to posit a massive economic slowdown on the one hand (traditional 3.5-percent growth limping along at half that rate for decades), while assuming typical stock-market returns of roughly 7.8 percent on the other.

The Center for Economic and Policy Research, which ardently opposes Bush's Social Security proposals, has concluded that stock gains under the trustees' economic projections would be 4.2 percent, a yield low enough to throw all of the White House's projected benefit gains into doubt.

Ideally, that would settle that. However, there was another very interesting quote in this article:

"Demography is destiny," Time Warner Inc. Chairman Richard D. Parsons said a day later, maintaining that an aging population will force Social Security changes, regardless of long-run economic growth.

That sounds kind of irrational. Fortunately, Parsons is a voice in the wilderness. After all, who's going to listen to anything the chairman of the biggest media conglomerate in the world says?