The Social Security "crisis" crew has often repeated the meme of a
future shortfall as fewer workers support a retired population. This viral idea,
the ratio of workers, is a fallacious argument that Bush and Co. state often.
This meme came not out of sound economic theory, but rather from a PR firm. The
fact is worker productivity gains make the "number of workers" rhetoric
irrelevant. Worker productivity, GDP, Public Debt levels and tax base are far
more relevant. This quote from the Concise Encyclopedia of Economics explains
the issue quite well:
While factors of production like land will always be scarce, the potential
for increasing total factor productivity is limitless. At least half, if not
more, of the growth in labor productivity in the post-World War II period has
been due not to the use of added capital, but to making better use of these
inputs. The United States produced 65 percent more in 1981 than in 1948 from
the same quantity of labor and capital resources.
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