- Marc Lee tears into the "unfunded liabilities" spin on public benefits which is now making an appearance in Canada:
(W)hat’s missing from this horror movie is that this is an artifact of CPP being a mostly pay-as-you-go plan. The report calculates all future payouts to beneficiaries, less current holdings of financial assets, but ASSUMES that all CPP contributions from workers present and future ceased. It is as if the CPP closed shop and took in no more premium revenues and simply paid out its legal obligations. On this basis, my telephone connection is an unfunded liability running thousands of dollars because I do not have that money in the bank to pre-fund those future phone bills.- Barbara Ehrenreich writes about how the U.S. has turned poverty into a crime.
In the real world, we have to consider both income/revenues and expenditures, particularly since the CPP is “intended to be long-term and enduring in nature,” according to the Chief Actuary. So a second calculation that does include future contributions from workers, and this basically wipes out the “unfunded liability”, though not entirely. By this second estimate there is still a shortfall of $6.9 billion, but this is over the coming 75 years and amounts of 0.3% of the CPP’s liabilities.
The gist of the Chief Actuary’s report is that the CPP is financially sound for at least the next 75 years.
(S)urpluses are being accumulated and invested in financial markets. A decade from now, those surpluses will be depleted and expenditures will exceed contributions, with the difference made up by income from accumulated assets. Those CPP assets are currently worth $143 billion and are anticipated to continue to rise, even amid negative cash flow from premiums less benefits. That is, only a share of investment income will be needed to keep payments up, and the rate of return on CPP assets would have to drop big time for the plan to start drawing down its capital at all.
So when the right cries “unfunded liabilities” do not panic. They are either mis-informed or deliberately trying to mislead you.
- Pogge points out the latest example of the Cons' deliberate know-nothingness being both a point of pride and an all-purpose excuse for ignoring realities which don't fit their political spin.
- Finally, Claude Denis offers up some more educational content about the realities of Quebec politics:
Much has been written over the years about the effect of the Bloc’s electoral dominance on Quebecers’ sense of belonging to Canada: that it has insulated them, weakened their sense of responsibility for the governance of the country, etc. But we are now seeing that the Bloc has also enabled non-Quebecers to ignore Quebec, to treat it as a non-entity when it comes to governing Canada. So, since the early 1990s, Canada has been governed essentially without francophone Quebec, and people outside Quebec like it just fine.
Now the NDP has come along to upset that happy blindness. Canadians outside Quebec are being shown that if Quebecers are going to rejoin the game of governing this country, the game itself is going to change. This was a risky gamble from the start for the NDP: speaking convincingly to Quebecers might alienate other Canadians. Indeed, the New Democrats had faced this choice many times before and had always shrunk from the challenge.
Jack Layton decided to go for it. He and his team are trying to articulate a new language of solidarity on the centre-left, between Quebecers and other Canadians. The first difficulty was to bring enough Quebecers on board. The second one, likely to prove the greater, is now to make other Canadians accept a change in their own sense of the country, of themselves, and of Quebec.
Layton’s mistake — if any — has been to call attention to Turmel and to what she represents too soon. The plan was to engage Canadians and Quebecers in a renewed political conversation over the next several years. Obviously, and sadly, circumstances forced Layton’s hand. Considering that Canadians outside Quebec have not had time to adjust to new realities brought on by the “vague orange,” he might have chosen someone else, most likely not from Quebec, and delayed a reckoning.
But who knows if and when this would have been possible? As it is, rather than looking at this as a mistake, I would rather see Layton’s choice as another courageous gamble. In effect, he is telling his fellow Canadians: “open your eyes.” Please.