George Will: Economy is Spectacularly Resilient.

George Will: –Economy is Spectacularly Resilient.”

–After an astonishingly interesting not to say agonizingly protracted election we have just been through, I think itês important to understand just how healthy and confident the American people have a right to feel as they go forward,” said noted columnist and political observer George Will, who was the guest speaker at the 2004 WANADA Annual Meeting.

Often using humorous baseball anecdotes to make his point and keep the crowd entertained, Will was decidedly upbeat about the economy, which he said is –spectacularly resilient.” Despite the bursting of the tech bubble in 2000, terrorism that devastated entire sectors of the economy, and the –worst crisis of corporate governance in the history of American capitalism,” he pointed out that the economy continued to grow at 2.4% in 2002,.

Will also noted that, between 1945 and 1982, the economy was in recession 22% of the time. Since 1982, the economy has been in recession exactly 14 months, 5% of the time. –We have figured out how to do this. And most important we have come to terms with the large welfare state,” he said.

But Will warned that the looming crisis with Social Security and Medicare and the –weight of the welfare state will begin to suffocate the energies of the economy” unless changes are made. –Nothing is more certain than the government is going to grow rapidly in the years ahead, because we have just had the last election before 77 million baby boomers begin to retire,” he said.

By 2030 the pressures on Social Security and Medicare will be –stupendous,” Will added. In 1960, he pointed out, this country spent 6% of GDP on healthcare. Today it is 16%, –and destined to rise.” Will said with life expectancy rising and the number of workers to retirees shrinking from 46 workers for every retiree to 3.1 workers to retirees today, and 2.1 workers by the time boomers retire, he declared, –That is not sustainable. Changes have to be made.”

The paradox is that, –People say they hate Washington, but love Social Security and MedicareÄthatês 33% of the government right there,” said Will.

He praised President Bushês proposals for partial privatization of Social Security and tax-free health savings accounts. –The president wants to reduce the supply of government by reducing the demand for it by making people feel more and more secure, independent, competent and self sufficient,” said Will.

As for the decline in manufacturing, Will noted that had been going on for 50 years, but that output has increased six fold, which he called –a triumph of American productivity.”

–But we have this capacity, this national hypochondria, to turn American success into reasons for pain and suffering,” he said.

Will praised the American economic model for managing an industrial society as one without equal, and added: –The secret of our success is to allow maximum scope for individual entrepreneurial energies to be expressed,” Will said. –No argument between the parties about that anymore. We are all economic opportunists today, all believers in a market society. We canêt do better than that.

–The real differences have narrowed,” he concluded. –Itês always a good time to be optimistic in America, but never more so than today.”