1.3. Social Security is primarily a pay-as-you-go program, which means that the government pays retirees their promised benefits by taxing today's workers. Imagine that Social Security moved to a fully funded program in which today's workers (or the government on their behalf) invested in assets, such as stock and bonds, to pay for their own retirement.

a. Discuss some of the costs and benefits of a fully funded program.

b. Discuss some of the difficulties of transitioning to the new system. Hint: If today's workers pay for their own future retirement, who will pay today's retirees?