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Social Security is redistributive much in the same way that flood or fire insurance is redistributive: those who never need it have overpaid, and those who do n
by legutierr 14y ago
Social Security is redistributive much in the same way that flood or fire insurance is redistributive: those who never need it have overpaid, and those who do need it have underpaid.
The flaw that exists in the current discourse regarding Social Security is that the program is framed as a retirement program. It is not. It is "end of life insurance". In fact, one correct term to use in describing programs such as Social Security is "Social Insurance":
http://en.wikipedia.org/wiki/Social_insurance http://en.wikipedia.org/wiki/Social_insurance
- twoodfin 14y agoNo, it's not redistributive merely like fire or flood insurance. My $300,000 house will cost the same amount to insure as my similarly-housed neighbor who makes twice as much. And the additional cost to insure a $400,000 house isn't typically greater than the reduction in cost to insure a $200,000 house. That's not how social security works. The benefit curve drops off dramatically in relation to the "pay-in" curve: http://www.ssa.gov/oact/COLA/piaformula.html http://www.ssa.gov/oact/COLA/piaformula.html And again, things will get worse when, seemingly inevitably, the payroll tax cap is lifted without substantially modifying the "bend points". A dollar you contribute to SS on your earnings over $56,000 is worth half the benefits of a dollar contributed under that amount.