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Where Does the Money Come from to Pay Social Security

question 27

Essay

Where does the money come from to pay Social Security benefits today to those who are receiving them? Why is this a concern for the baby boomer generation?


Definitions:

Adequate Liquidity

The ability of an entity to meet its short-term financial obligations with its readily available assets.

Accounts Receivable Factor

A financial transaction where a company sells its accounts receivable to a third party (factor) at a discount, to obtain immediate cash.

Bad Debt Risk

The risk that money owed to a company by debtors will not be paid and thus become a bad debt.

Compensating Balance

A minimum account balance that a borrower must maintain as part of a condition for obtaining a loan.

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