Left Business Observer: Social Security, revisited

It's uncanny reading Paul Krugman's New York Times column these days—his stuff on Social Security sounds like what LBO was saying in 1998. His February 1 piece was all about how the Trustees of the Social Security system are projecting absurdly low economic growth rates, about half the long-term average, even though proponents of privatization assume that the stock market would continue to return its historical average. That couldn't happen, unless the standard measure for evaluating the dearness or cheapness of stock prices, the price/earnings ratio (which compares stock prices to underlying profits), were to scale unprecedented and ludicrous heights. The numbers Krugman used to illustrate the point are a bit different from LBO's seven-year-old vintage, but not by much.