ultimately, what the government can pay [in future Social Security benefits] depends on how the economy performs. If we continue to grow as we have in the neighborhood of 2 percent per annum per capita over the past 50 years, we won't have any difficulty paying for it either, as a governmental program or in private accounts. If the economy goes into long-term stagnation, then the government is not going to be able to sustain it because the tax base for it won't be there. So you need to have a successful and rapidly growing economy in order for standards of living for the elderly to improve.
I think the odds that we will are very high. I think we're already actually underestimating. I mean, when I gave you the figure of 2 percent per annum, that figure does not take into account improvements in the quality of health care or in the quality of education, or in the quality of many manufactured goods. So, if you take these quality improvements into account as I've tried to do roughly in one paper, the real rate of growth is 3.1 percent, not 2 percent.
How fast is the economy growing? According to Fogel, faster than Congress can give away money to the elderly. That's fast!