I wrote: >> I would say that SS _is_ a form of insurance. Insurance companies >> redistribute money from those whose houses don't burn down to those whose >> houses do burn down (to use the example of fire insurance), sharing the >> risk. SS redistributes from those who are suffering from retirement, >> disability, etc. A key difference is that SS administration costs >> are lower >> than are private insurance costs and the tax that finances SS is >> regressive. Further, the SS administration does not feel obligated to pay Max replied: >Unlike welfare, and like insurance, beneficiaries make >earmarked payments into the program. ... since funds are shifted about between various government budgets, the "earmarked" part is pretty unimportant. The poor pay a lot of sales taxes (relative to the size of their incomes) and the working poor pay the regressive payroll taxes. These, indirectly, help pay for welfare. So _in effect_, welfare has insurance-like aspects. There is also a lot of temporary poverty, where people fall below the official poverty line for only a year or so. When they're doing well, they help finance a "safety net" which they may need. >> SS disability programs seem to be somewhere on the spectrum between the SS >> pension and "welfare." >From a pure market insurance standpoint, DI is one >of the best parts of the Soc Sec 'deal.' The >equivalent for Survivors insurance, particularly >for younger workers, is pretty cheap and ubiquitous. >Why do you liken it more to welfare? The reason can be seen from the context of what I said. SS follows a very simple formula in distributing old-age benefits. On the other hand, DI involves much more bureaucratic and paternalistic criteria, where the disabled have to justify themselves as being the "deserving disabled." Jim Devine [EMAIL PROTECTED] & http://clawww.lmu.edu/Faculty/JDevine/JDevine.html
