Louis Woodhall writes in The Real Social Security Crisis is Economic Growth:
The Trustees of the Social Security Administration assume (in their “Intermediate” case”) that over the next 75 years, the U.S. economy will grow at an average “real” rate of 1.9%…America can’t live on a “starvation diet” of 1.9% real economic growth. Over the past 75 years, the American economy has grown at an average real annual rate of 3.43%.
Louis should read his own source more carefully:
For the intermediate assumptions, the annual change in productivity is assumed to decrease from 3.4 percent for 2003 to 2.7 percent for 2004, then to an average of 1.9 percent for the years 2005 to 2007. Though declining, these changes are relatively strong by historical standards. After 2007, the annual change in productivity gradually decreases to the ultimate assumed level of 1.6 percent by 2012. For the low cost assumptions, the annual change in productivity decreases gradually from 3.5 percent for 2003 to the ultimate assumed level of 1.9 percent by 2011. For the high cost assumptions, the annual change in productivity decreases from 3.3 percent for 2003 to 1.2 percent for 2004.
The reason the Trustees are forecasting this 1.9% real GDP growth is that they are assuming employment growth will be only 0.3% per year as they assume population growth will be about the same. The Trustees also note:
For the 40 years from 1962 to 2002, annual increases in total productivity averaged 1.7 percent, the result of average annual increases of 2.6, 1.1, 1.6, and 1.7 percent for the 10-year periods 1962-72, 1972-82, 1982-92, and 1992-2002, respectively.
In other words, much of the 3.4% per annum real GDP growth that Louis Woodhill notes as the average in the past has been from increases in population and employment.