processed by the new Social Securit

processed by the new Social Security Administration, and so the first Social
Security check in U.S. history was issued to her on January 31, 1940, for $22.54.
Ida May went on to live for 35 more years, dying at age 100 in 1975. Over
those 35 years, she collected a total of $22,888.92 in Social Security benefits.
Quite a return on her $24.75 investment! Ida May is a striking example of the
first generation of Social Security beneficiaries who were the big winners
under this new social program. 
In period 3, the elderly are the first generation that paid taxes when they were
young in period 2. These retirees paid $2,100 per person in taxes when they
were working but receive $2,315 in benefits when they are old, roughly 10%
more than they paid in. Where does this extra money come from? First, there
is the wage growth effect: each current worker is earning more than these retirees
did when they were young, due to higher productivity. Because taxes are paid
on the higher earnings of the period 3 young, there are more funds to be paid as
benefits to the retirees. Second, there is a population growth effect: because more
workers are paying taxes, there are more funds to be paid as benefits to retirees.
In our example, we have assumed that population and wages each grow by
5% in each period. In the real world, however, these growth rates vary and the
impact of an actual Social Security system on the “middle generations” of
recipients is ambiguous. The impact depends on the size of this population and
on wage growth effects. If both are large, beneficiaries can receive a high rate of
return on the taxes they’ve paid in. If either or both are small or negative, the
beneficiaries can receive a very poor rate of return on their tax payments.
In periods 3 and 4, retirees earn a 10% rate of return on the amount of
money they put into the system when they were young. Imagine, however,
that in period 5 the young workers decide that they no longer want to participate
in the Social Security program. They haven’t yet paid taxes, so there is no
cost to them if they leave the system. Who bears the cost of this decision? The
period 5 retirees: they paid $2,315 per person in taxes when they were working
in period 4 but receive no benefits in return now that they are retired.
Thus, the final generation is hurt by unfunded Social Security.
Lessons Learned To summarize, this example illustrates two points. First, the
rate of return provided by an unfunded Social Security to “middle generations”
depends on the rates of population and wage growth. Second, unfunded Social
Security carries with it what Diamond and Orszag (2004) call a legacy debt.
The unfunded transfers to the Ida Fullers and others in the first generation of
retirees receiving Social Security put the system immediately into a large debt.
If society decided to end the Social Security program, the existing generation
of older workers and retirees, who paid the taxes to support the program,
would receive no benefits, and so their past tax payments would end up paying
off the debt.
It seems unlikely that the political process would allow a single generation of
workers to be held accountable for this large debt. Thus, reforms of the Social
Security system must all grapple with the fact that this debt must be somehow
paid before we can bring our unfunded Social Security system into balance.

Hasil (Bahasa Indonesia) 1:

diproses oleh pemerintahan jaminan sosial yang baru, dan begitu sosial pertamaPemeriksaan keamanan dalam sejarah AS dikeluarkan untuk nya di Januari 31 1940, untuk $22.54.Ida dapat melanjutkan untuk hidup selama 35 tahun lebih, meninggal pada usia 100 tahun 1975. Atas-35 tahun, ia mengumpulkan total $22,888.92 manfaat jaminan sosial.Cukup pengembalian investasi $24,75 nya! Ida Mei adalah contoh yang mencolokgenerasi pertama penerima manfaat jaminan sosial yang pemenang besardi bawah program sosial baru ini. Dalam periode 3, orang tua adalah generasi pertama yang membayar pajak ketika merekamuda dalam periode 2. Pensiunan ini dibayar $2.100 per orang dalam pajak ketika merekabekerja tetapi menerima $2,315 manfaat ketika mereka sudah tua, kira-kira 10%lebih dari mereka dibayar. Mana uang tambahan datang dari? Pertama, adaefek pertumbuhan upah: setiap pekerja saat ini adalah pendapatan lebih dari pensiunan inilakukan ketika mereka masih muda, karena produktivitas yang lebih tinggi. Karena pajak dibayarpada pendapatan yang lebih tinggi dari periode 3 muda, ada lebih banyak dana akan dibayarkan sebagaimanfaat untuk pensiunan. Kedua, ada efek pertumbuhan populasi: karena lebihpekerja membayar pajak, ada lebih banyak dana yang harus dibayar sebagai manfaat untuk pensiunan.Dalam contoh kita, kita telah mengasumsikan bahwa populasi dan upah setiap tumbuh5% dalam setiap periode. Di dunia nyata, namun, tingkat pertumbuhan ini bervariasi dandampak dari sistem jaminan sosial sebenarnya pada "generasi tengah" darirecipients is ambiguous. The impact depends on the size of this population andon wage growth effects. If both are large, beneficiaries can receive a high rate ofreturn on the taxes they’ve paid in. If either or both are small or negative, thebeneficiaries can receive a very poor rate of return on their tax payments.In periods 3 and 4, retirees earn a 10% rate of return on the amount ofmoney they put into the system when they were young. Imagine, however,that in period 5 the young workers decide that they no longer want to participatein the Social Security program. They haven’t yet paid taxes, so there is nocost to them if they leave the system. Who bears the cost of this decision? Theperiod 5 retirees: they paid $2,315 per person in taxes when they were workingin period 4 but receive no benefits in return now that they are retired.Thus, the final generation is hurt by unfunded Social Security.Lessons Learned To summarize, this example illustrates two points. First, therate of return provided by an unfunded Social Security to “middle generations”depends on the rates of population and wage growth. Second, unfunded SocialSecurity carries with it what Diamond and Orszag (2004) call a legacy debt.The unfunded transfers to the Ida Fullers and others in the first generation ofretirees receiving Social Security put the system immediately into a large debt.If society decided to end the Social Security program, the existing generationof older workers and retirees, who paid the taxes to support the program,would receive no benefits, and so their past tax payments would end up payingoff the debt.It seems unlikely that the political process would allow a single generation ofworkers to be held accountable for this large debt. Thus, reforms of the SocialSecurity system must all grapple with the fact that this debt must be somehowpaid before we can bring our unfunded Social Security system into balance.