Economics

posted by .

The chapter states that the elderly population in the United States is growing more rapidly than the total population. In particular, the number of workers is rising slowly, while the number of retirees is rising quickly. Concerned about the future of Social Security, some members of Congress propose a “freeze” on the program.

If tax payments per worker were frozen, what would happen to total expenditures? To benefits per retiree?

I would think by the use of the word frozen that tax payment would be fixed and in that case total expenditures would be fixed and benefits per retiree would be fixed, as well. Is this correct?

No, not correct. If the PAYMENTS per employee were fixed, with the number of employees relative to the number of retirees decreasing, then the money available per retiree (and their payments) would have to drop.

Total expenditures would rise with the number of workers, which continues to increase in this country mainly as a result of legal and illegal immigration, but expenditures would not rise as fast as the retired population.

So the benefits per retiree, being that expenditures would not rise as fast as the retired population, would be on the decline, true or not?

True.

  • Economics -

    If the number of retirees was rising and total expenditures were frozen, then benefits per retiree would decline over time. Because the number of workers is rising, albeit slowly, tax payments per worker would decline slowly over time.
    If benefits per retiree were frozen, total expenditures would rise quickly, along with the number of retirees. To pay for the increased expenditures, tax payments per worker would rise because the number of workers isn’t growing as rapidly as the number of retirees.
    If tax payments per worker were frozen, total expenditures would rise slowly, at the same rate as the growth rate of the number of workers. Because the number of retirees is rising more rapidly, benefits per retiree would decline over time. See Section: The Federal Government.

Respond to this Question

First Name
School Subject
Your Answer

Similar Questions

  1. Economics

    The chapter states that the elderly population in the United States is growing more rapidly than the total population. In particular, the number of workers is rising slowly, while the number of retirees is rising quickly. Concerned …
  2. 12th grade Economics

    The chapter states that the elderly population in the U.S. is growing more rapidly than the total population. In particular, the number of the total workers is rising slowly, while the number of retirees is rising quickly. Concerned …
  3. algebra

    About one fifth of the adult population in the United States smoked in 2005. Within the part of the population that smoked, sixth of twenty five of them were aged 25 to 44. What fraction of the adult population in the United States …
  4. Algebra 2

    According to the US Census Bureau, the population of the United States has been growing at an average rate of approximately 2% per year. The census is taken every 10 years, and the population in 1980 was estimated at 226 million people. …
  5. Math 8R - Help!!!!!!!!

    In 2011, the population of the United States was about 3.12 x 108. The population of the Japan was about 1.27 x 108. About how much more was the population of the United States than Japan?
  6. History8

    Which of the following was NOT a reason the United States needed a stronger national government system?
  7. Science

    The current population in the United States is 318,968,000. The rate is .72. What will the population be in the United States in 10 years?
  8. History

    9.)How did the increase of textile mills and factories in the North affect the population in the South during the period from 1820 to 1850?
  9. Math

    3. The population of Columbus, Ohio, in 2014 was about 823,000. The population of the United States was about 319 million in 2014. (a) Write each population in scientific notation. (b) About how many times larger was the population …
  10. U.S History

    Case Study: General Andrew Jackson: Andrew Jackson's military career spanned several wars including the American Revolution, the Creek War, the War of 1812, and the First Seminole War. After the Creek War, Jackson and the Creek Indians …

More Similar Questions