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Growth Is No Solution


Economic growth is a great thing, but how does it fix Social Security? James Glassman of JP Morgan Chase seems to be saying that forecasts about Social Security’s solvency are too pessimistic about growth–that, at least, is how reform opponents are taking his remarks. But growth is highly unlikely to make the program solvent. Benefits are tied to wages. Increased growth would increase revenues. But it would also mean increased wages, and therefore increased benefits. The structural gap between revenues and benefits can’t be eliminated by increased economic growth.


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