Here's another piece on a favorite puzzle of mine: is Social Security a "tax" (in the sense of wealth distiribution) or just a (compulsory) savings program? Veghte throws at least one issue on the table that seems to me almost lost in a discussion like this: Social Security as insurance. Odd that you can lose sight of a simple point like this, but consider the straightforward case: Elmer contributes $100,000 to Social Security. He retires at 65 and dies at 66, having collected just one payment. Does this mean that the government stole Elmer's money? Not necessarily at all. Suppose he Elmer had taken $100,000 of "his own money" and bought an annuity to provide $20,000 a year for life. The seller is, of course, making a bet on Elmer's prospective date of death. Elmer might get lucky and live for 20 years, costing the insurance company good and plenty. Or he might (as in this example) die after jut a single payment. The insurance company gets to keep the other $80,000 of course--that's the kind of money it needs to pay all the people who live "too long." But I don't think we'd think of that as piracy/confiscation or any other of the snarl words we like to tag onto social security.
I should think the insurance angle is even clearer in the case of disability payments. Nobody really wants to draw on them at all. But we're more or less settled on the principle that we need to put away something against the contingency.
See also: It's a Candy Mint! It's a Breath Mint!
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