You Can't Spell "Douchebag" Without "LaVorgna"

The Wall Street Journal's Mark Whitehouse has an excellent breakdown today (subscription required) of how it's going to be extremely difficult, if not well-nigh impossible, for GDP to grow at the rate the Soc. Sec. trustees assume it will (1.9% per year), at the same time stock returns grow at the rate Chimpy McSmirkalot says they will in order to justify the usefulness of his privatization scheme (6.5% per year).

The story also includes this chart, compiling a list of economists' projections for the average annual stock return rate for the next 44 years:



You'll notice that Joe LaVorgna, who, when the Bush administration says "Bend over," he asks, "How far?" fully agrees with the concept that stocks will return 6.5% per year for the next 44 years. Goodness, what a surprise. I don't know what Jeremy Siegel's deal is, but he's predicting 6%. It's possible he believes economic growth will be stronger than 1.9%. LaVorgna, on the other hand, will fully support the trustees' projection for GDP growth, even as he predicts a tax-cut fueled economic boom that will span the next five-hundred years. He has neither credibility nor shame.

Anyway, that aside, the article is really good. Basically, in order for stocks to grow at the 6.5% per year the administration promises, the economy would have to grow much faster than 1.9% per year. If the economy grows at that rate, then Social Security's problems will be greatly reduced -- perhaps even eliminated.