What is the definition of Social Insurance?

[Ken Diamond <kd@bmwinc.com>]

I would like to know what is meant by social insurance and how this
forum's participants distinguish it from both regular insurance
and social welfare.

Our summarizer wrote, "Those that endorse the present approach
point out that a system of social insurance serves important societal
goals that a privatized system neglects." Is it possible to separate
those important societal goals from Social Security?  Can we talk
about what we want to make sure people have access to in our society
first and then decide how they should get it and who should pay
for it and why? Who pays is the most important and most avoided
point. Those who think it doesn't matter can prove it granting me
power of attorney over you financial assets to be expended only
for whatever societal goals you deem important.  Since none will,
it's safe to assume everyone cares about much they pay for such
things making deciding how to share the burden for our common goals
the crucial question.

The most important difference between the existing system and
privatization is that in privatization you own what you contribute
and those contribution's earnings. Under Social Security the return
you get in benefits is based only marginally on what you pay in
taxes. A dollar of taxes paid on the first $5500 of wages is 2 1/2
times as valuable taxes paid on the next $ 26,500 and 6 times as
valuable as on the last $45,500. That value is also adjusted by
many factor relating to you family status.

Mutual funds don't pay you 50% more for your spouse and your
ex-spouse. They don't pay low wage earners many time the return of
those who are paid well. Insurance companies only pay benefits for
which you paid premiums based on the risk and the potential cost
of claims. Mutual funds don't reduce the rate of return with each
succeeding generation to benefit the preceding ones.. Privatizing
ends all this redistribution for "important societal goals."
Neither those supporting privatization without admitting how it
will effect redistribution nor those who support the status quo
without being candid about who the system takes from and to whom
it gives are being honest. Or they just don't understand how the
system works.