Harper as carny...
Robert over at myblagh posts that the Tories are lining up the Canada Pension Plan for future destruction and cloaking it as part of their effort to fix the federal/provincial fiscal imbalance.
It works like this. The Conservatives plan to reduce employer/employee CPP contributions and replace the lost dollars with money from the federal surplus, thereby reducing the federal side of the federal/provincial fiscal equation and at the same time linking CPP funding to the federal surplus. We all know that one of the problems that has lead to this federal/provincial "crisis" in the first place, aside from the Tory need to have something to beat the Liberals with, is in fact the size of the federal budget surplus. Therefore, any solution to the imbalance will result in money being transferred back from federal coffers to the provinces, shrinking federal surpluses, and (are you still with me?) limiting the amount of money that the feds can afford to prop up the CPP with.
This is an obvious fiscal crisis in CPP just waiting to happen, and unlike the demographic bomb that CPP has apparently dodged by increasing contributions under the Liberals in the 90's, this one will be unavoidable. Oh yeah, and optional, this one is optional.
We have seen this played out before south of the border in the Bush government's attempt to privatize Social Security, except they were not able to manufacture a real financial crisis in the program because competent governance in the 90's left it with an unassailable surplus for more than a decade. Instead, the administration used overly pessimistic economic forecasts to emphasize the cost of Social Security and stupidly good forecasts for the stock market to "demonstrate" how much better the public would be if they "owned" their own pension plan.
It hasn't worked there yet, and we should make sure to not let it happen here, either.
It works like this. The Conservatives plan to reduce employer/employee CPP contributions and replace the lost dollars with money from the federal surplus, thereby reducing the federal side of the federal/provincial fiscal equation and at the same time linking CPP funding to the federal surplus. We all know that one of the problems that has lead to this federal/provincial "crisis" in the first place, aside from the Tory need to have something to beat the Liberals with, is in fact the size of the federal budget surplus. Therefore, any solution to the imbalance will result in money being transferred back from federal coffers to the provinces, shrinking federal surpluses, and (are you still with me?) limiting the amount of money that the feds can afford to prop up the CPP with.
This is an obvious fiscal crisis in CPP just waiting to happen, and unlike the demographic bomb that CPP has apparently dodged by increasing contributions under the Liberals in the 90's, this one will be unavoidable. Oh yeah, and optional, this one is optional.
We have seen this played out before south of the border in the Bush government's attempt to privatize Social Security, except they were not able to manufacture a real financial crisis in the program because competent governance in the 90's left it with an unassailable surplus for more than a decade. Instead, the administration used overly pessimistic economic forecasts to emphasize the cost of Social Security and stupidly good forecasts for the stock market to "demonstrate" how much better the public would be if they "owned" their own pension plan.
It hasn't worked there yet, and we should make sure to not let it happen here, either.
