Pay-As-You-Go(PAYGO)- Wikipedia, the free encyclopedia

(1) PAYGO is best explained in an analogy of a supermarket that doesn't accept credit cards. When the customer sees something they want to buy, they take the item to the clerk, open their wallet, take out money, and pay for the item - which they then own and can take home with them. If when they open up their wallet they see no money inside, they either don't get to purchase the item, or it is not sold to them because they don't have the money. They would then need to find a way to put more money in their wallet to pay for the item before purchasing the item.

(2) Budgeting:

• The PAYGO or pay-as-you-go rule compels new spending or tax changes to not add to the federal deficit. New proposals must either be "budget neutral" or offset with savings derived from existing funds. [1] The goal of this is to require those in control of the budget to engage in the diligence of prioritizing expenses and exercising fiscal restraint
• An important example of such a PAYGO system in this first sense is the use of PAYGO rules in the United States Congress. First enacted as part of the Budget Enforcement Act of 1990 (which was incorporated as Title XIII of the Omnibus Budget Reconciliation Act of 1990), PAYGO required all increases in direct spending or revenue decreases to be offset by other spending decreases or revenue increases. It was thought that this would control deficit spending.

(3) Social Insurance

• In social insurance, PAYGO refers to an unfunded system in which current contributors to the system pay the expenses for the current recipients. In a pure PAYGO system, no reserves are accumulated and all contributions are paid out in the same period. The opposite of a PAYGO system is a funded system, in which contributions are accumulated and paid out later (together with the interest on it) when eligibility requirements are met.
• An important example of such a PAYGO system in this second sense is Social Security in the U.S. In that system, contributions are paid by the currently employed population in the form of a payroll tax, also called the FICA tax, which stands for the "Federal Insurance Contributions Act", while recipients are mostly individuals of at least 62 years of age. Social Security is not a pure PAYGO system, because it accumulates excess revenue in so-called Trust Funds, officially known as the Old-Age, Survivors, and Disability Insurance Trust Funds (OASDI).

자료: PAYGO - Wikipedia, the free encyclopedia