Is the Social Security system based on the same principles as private insurance?

The answer to this question is no. Social Security is a pay-you-go system and an inter-generational income transfer program where taxes are collected from present workers to pay current benefits. Unlike private insurance companies, surplus taken in is put into is invested into government bonds that the government both pays and receives interest on. These investments are nothing like the private insurance system. Social Security is based on IOU’s from the treasury department that has no value.

Do you think workers should be permitted to invest all or part of their Social Security taxes into personal retirement account?

I personally think that current workers should have an option to invest their entire Social Security into their own personal retirement accounts because our current system is outdated and underfunded. By the time present worker reach retirement, there won’t be any funding left. Having our person retirement account will allow present and future workers to take ownership of our personal retirements. I believe if we took this route, our Social Security payments each month would be less than what we are currently paying into the government’s outdated system.

How does Social Security affect the economic well-being of blacks relative to whites and Hispanics?

Due to a shorter life expectancy of blacks, Social Security is adversely affect because blacks are more likely to pay in more during a lifetime and die without
Microeconomics
ever receiving a single payment. Our current system does not work to their favor. It does work in the favor of Hispanics because of their above average life expectancy over both white and black race.

Does the current Social Security system promote income equality?

No. Our current Social Security system has proven to show that Americans with higher income and education live longer and is able to draw from Social Security longer. Whereas, poor Americans with no education, pay into the system longer because they started work at an earlier age and die before they are eligible to draw Social Security. Another issue is labor participation is falling as spouse earnings increase. Couples with high-wage worker provide the non-working spouse benefits that are equal to 50% of the working spouses.

The Social Security payroll tax is split equally between the employee and the employer. Would it make a difference if the entire tax were imposed on employees? Would employees be helped if all taxes were imposed on the employees? I personally don’t think it makes a difference of who writes the check to the government to cover the taxes. The burden of the situation would depend on the statutory and actual incidences which are not the same. Actual depends on the slope of the supply and demand curves and changing who really writes the check doesn’t change who actually is paying the taxes. Example: Although the employer may claim to pay all taxes, they might have lower employee wages to actually cover cost, leaving the actual burden on the employee.