Robert (not Paul) Waldman Takes the Stock Return Challenge

I see Robert Waldmann has taken up the old challenge from the Social Security privatization days of whether it was possible to get a 7.0 percent real return when price to earnings ratios in the stock market were over 20 to 1 (2005 days) or 30 to 1 (late 1990s privatization craze). He claims to have done the trick by assuming that stock prices grow at a 3.0 percent real rate (the same as the growth rate for the economy), stocks pay out 1.9 percent in dividends, and effectively pay out 3.3 perc...