LESON15B

LESON15B - Econ 275 - Public Finance - Winter 1994 - 3/1/94...

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Econ 275 - Public Finance - Winter 1994 - 3/1/94 - Lesson #15 - leson15b.275-- Page -- Admin Lots of handouts on social security NPV of social security for different earnings levels and family structure. Rosen (1992) Table 10.4 NPV of SS for different earnings and ages. Rosen (1992) Table 10.3 SS tax rates. Rosen (1992) Table 10.2 Major social insurance programs. Rosen (1992) Table 10.1 Table of SS benefits (1992?) from "Guide to Social Security and Medicare--1992) William M. Mercer, Inc. Start on social security. (Taken from in leson18a.475 and leson16a.275) Background Started in 1935 as one of Franklin Roosevelt's "New Deal" programs. First recipient, Ida Fuller, paid about $22 in SS taxes, lived until the age of 99 and collected about $20,000 in benefits: Rosen p207. That should have been a warning. Pay-as-you-go financing--current expenditures are paid for with current tax receipts. General Trends: Enrollment: 1970 - 26.2 million 1989 - 39.2 million Costs 1970 - $31.9 billion 1989 - $230.9 billion 1992 - $282.8 billion. This figure represents approximately 28% of all federal expenditures and 6.8% of total GNP. Financed from payroll tax. Both employee and employer currently pay 6.2% of an employee's wages up to a cap of $55,500. Cash payments are made to recipients based on work history, age, and family status. The system as currently run is a transfer from the young to the
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This note was uploaded on 07/08/2010 for the course ECON 275 taught by Professor Mcintyre during the Winter '05 term at BYU.

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LESON15B - Econ 275 - Public Finance - Winter 1994 - 3/1/94...

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