Social insurance: Logically, it can't be construed as a handout | New ...

A person who certainly commands a singular depth of knowledge regarding government benefits programs, need-based giving, disability, supplemental assistance and related matters felt compelled recently to weigh in on what are commonly lumped together as "social insurance" programs.

Namely, those are Social Security retirement benefits, Social Security Disability payments, workers' compensation and Medicare.

The fundamental point made by Alicia Munnell, who directs the Center for Retirement Research at Boston College, is this: The government pays out, yes, but far too many people -- especially those demanding program cuts and curtailed entitlements -- simply don't get the crucial distinction between social insurance and means-tested benefits.

The latter type of assistance, indeed, can be construed as a handout, although that is probably a term reserved for the calloused. Many proponents of helping those who are simply less fortunate -- the sick and aged, the blind, children in poverty or with a severe illness or disease -- prefer to think of it as compassion or simple decency.

Social insurance, though, is entirely remote from notions of a government granting aid or bestowing unearned largesse.

Munnell's stance: We earned it, so certain people need to stop thinking of it in terms of "from the government" or "the government writing the check."

That is true, but consider: Social Security retirees contributed solidly and consistently for their worker's insurance for their entire working lives. Workers also contribute for Social Security Disability Insurance. And although workers' comp premiums are usually paid completely by the employer, many economists commonly view the outlay as more accurately reflecting what is really part of an employee's compensation. In other words, unemployment insurance and workers' compensation are really just a component of worker benefits that are not paid in wages.

And Medicare, too, is partially paid through worker contributions.

So, don't call it welfare, says Munnell. Through social insurance, workers compel themselves to prepare for the future. Those government checks are earned and are "the payoff of a lifetime of premiums."

Source: Smart Money, "They're not moochers and it's not welfare," Alicia Munnell, March 8, 2012

Source: http://www.newyorkssdiattorney.com/2012/03/social-insurance-logically-it-cant-be-construed-as-a-handout.shtml

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