I suggest reading the whole article.http://economistsview.typepad.com/economistsview/2013/12/if-social-insurance-didnt-redistribute-income-it-wouldnt-work.html
http://www.thefiscaltimes.com/Columns/2013/12/17/Social-Safety-Net-Redistributes-Income-s-Why-It-Works
Mark Thoma The Fiscal Times
December 17, 2013
Many conservatives have attacked social insurance programs such as Social Security and Obamacare because they redistribute income from the rich to the poor, the young to the old, or from makers to takers. But there is nothing unusual about the fact that insurance programs redistribute income among participants. If they didn’t, it wouldn’t be insurance.
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This is what insurance does. It pools risk and distributes the losses across the participants in the program. Fire insurance, for example, pools the contributions of participants, and when somebody experiences a loss from fire the money is redistributed from those who did not have a fire to those who did. Everyone understands that the fees they pay provide this protection, and they don’t object when the pooled contributions are redistributed to cover losses.
Social insurance programs are fundamentally the same. When we start out in life, nobody knows for sure who will end up unhealthy, or poor in old age. So we pool the risk of this happening in programs such as Social Security and health insurance, and there is subsequent redistribution from those who do well in life to the less fortunate.
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The claim from the right that social insurance moves income from one person to another is true. But that’s not a bug, that’s a feature. The only way insurance of any kind can work is by redistributing funds from the fortunate to the unfortunate, and the mere fact that such redistribution occurs is not a reason to object to social insurance programs. - See more at: http://www.thefiscaltimes.com/Columns/2013/12/17/Social-Safety-Net-Redistributes-Income-s-Why-It-Works#sthash.L1gPcHlB.dpuf
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