LESON16A

LESON16A - Econ 275 Public Finance Fall 1992 Lesson#16...

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Econ 275 - Public Finance - Fall 1992 - 10/27/92 - Lesson #16 - leson16a.275-- Page -- Admin Bring colored chalk Handout with Medicaid,Medicare and Social Security Fun Facts Ask how the projects are coming. Announcement: halloween. Discussion Social Security Ch 13 Economic Questions Effect upon savings Wealth effect- Guaranteed income, people won't necessarily save on their own--reduction in savings Retirement effect--people won't work as long in order to get the benefits of SS and thus must have resources for a longer period of time bequest effect--transfer to children. Estimate by Martin Feldstein that for every dollar of social security wealth that consumption increases consumption by 1.8 cents and thus savings decreased by the same amount. For 1990 there was approximately $7 trillion in social security wealth. The loss in savings is then estimated at $126 billion, total personal savings that year were $179 billion. Big effect Others have argued that the effect is much smaller. Effect upon retirement and work patterns 1930- 54% of men over 65 participated in workforce 1950- 41.4 1990- 14.8 Mr. Hooper turns 65 in 1990. He could retire at 42 % of his
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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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LESON16A - Econ 275 Public Finance Fall 1992 Lesson#16...

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