ECON 201 Lecture 2: Microeconomics-lecture 2

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Social security: pay as you go system, f. i. c. a on pay stub, you pay money for the retired"s social security checks, i. r. a- independent retirement account. Company takes your money and invests it in order to better/increase your account. Stocks are investments in shares of a company. Bonds are iou"s - you pay a certain amount and later get the same amount back plus some interest. In bankruppcy stock holders get paid back first. The demographic problem: not enough current young workers to pay for the baby booming generation of retired now, the numbers of generations are not working out in different populations. What about the trust fund : when the federal government takes money from social security for other things. What to do: they could increase current working taxes, or they could cut off people who have had enough social security, plans to phase out the system. A plan from chile that made the elderly rich.

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