Smallc Posted March 31, 2016 Report Share Posted March 31, 2016 (edited) If the economy does better than expected, there won't be a deficit of $30B. Finance has said as much. Where's your proof to the contrary? Edited March 31, 2016 by Smallc Quote Link to comment Share on other sites More sharing options...
Wilber Posted March 31, 2016 Report Share Posted March 31, 2016 If the recon only does better than expected, there won't be a deficit of $30B. Finance has said as much. Where's your proof to the contrary? If, and if not, well we will just borrow some more to maintain something we shouldn't have borrowed to finance in the first place. Borrowing money to finance entitlement programs you can't afford is like taking out a loan to buy dinner and never paying off the loan. Once eaten, the dinner is gone and long after you are dead and gone, your grand kids will still be paying for your dinner while having to buy their own dinner. Quote Link to comment Share on other sites More sharing options...
SunnyWays Posted March 31, 2016 Report Share Posted March 31, 2016 If the recon only does better than expected, there won't be a deficit of $30B. Finance has said as much. Where's your proof to the contrary? No proof - it's all "wait and see". There's a temptation to play a shell game - to confuse the numbers in order to spend more than the planned $12 billion in new spending - or to ignore the diligence that's required to keep regular spending in check. If you're a fan of transparency, we should all be looking to see that $18 billion "base deficit" reduced each quarter as the economy picks up (as it hopefully will).....and this should be tracked and reported by the media in simple, straight forward terms. Would you agree with that? Quote Link to comment Share on other sites More sharing options...
Smallc Posted March 31, 2016 Report Share Posted March 31, 2016 Of course I'd agree we should watch the numbers. If the numbers show you're right, I'll tell you that you're right. Quote Link to comment Share on other sites More sharing options...
dre Posted March 31, 2016 Report Share Posted March 31, 2016 Borrowing money to finance entitlement programs you can't afford is like taking out a loan to buy dinner and never paying off the loan. Once eaten, the dinner is gone and long after you are dead and gone, your grand kids will still be paying for your dinner while having to buy their own dinner. If you die of hunger because you didn't get that dinner then your kids might never be born in the first place. The best thing we can do for future generations is leave them a good country to live in. A modern country where the government has the right priorities and the programs that people want. Sometimes deficit spending can be an important part of that. Quote Link to comment Share on other sites More sharing options...
Wilber Posted March 31, 2016 Report Share Posted March 31, 2016 (edited) If you die of hunger because you didn't get that dinner then your kids might never be born in the first place. The best thing we can do for future generations is leave them a good country to live in. A modern country where the government has the right priorities and the programs that people want. Sometimes deficit spending can be an important part of that. Maybe they should be buying their food and cooking it themselves. It is a lot cheaper. A good country with a pile of debt to maintain apparently. Edited March 31, 2016 by Wilber Quote Link to comment Share on other sites More sharing options...
Argus Posted March 31, 2016 Author Report Share Posted March 31, 2016 IThe best thing we can do for future generations is leave them a good country to live in. A modern country where the government has the right priorities and the programs that people want. Sometimes deficit spending can be an important part of that. And an enormous debt burden. Don't forget that. Just as young people today are struggling under higher taxes to finance the social programs the boomers brought into place but chose to borrow for, like CPP, so too will we be dumping more debt on the next generation. Quote Link to comment Share on other sites More sharing options...
alexmac Posted March 31, 2016 Report Share Posted March 31, 2016 Well now what have our little buddies the Liberals been up to ? Hmmm interesting , change the climate by taxation , maybe that was a typo and they will do something other than tax us , maybe kind of we will see. Okay what did they do with the requests from homeowners to get rebates on solar and wind installations ? Ah ha.....hhmmm , well maybe they will do that in the next election so they look good. Wow we do get to give our carbon tax dollars to help other countries go green....guess it takes a ton of money to increase a tax in them countries. Okay so moving on th Ei and what do we see .....I will be dammed ...if it was another time I would have thought PET was standing right there taking the money from the Unemployment fund-aka-EI-aka-cash cow. Well I have to say it is very refreshing to see Junior run the country just like an old pro lining his and all his buddies pockets all the way to the bank. Why , because he can and 39.6% of the elite people in Canada voted for him giving them a RESOUNDING majority....welcome to Canada. Quote Link to comment Share on other sites More sharing options...
Smallc Posted March 31, 2016 Report Share Posted March 31, 2016 And an enormous debt burden. Don't forget that. Just as young people today are struggling under higher taxes to finance the social programs the boomers brought into place but chose to borrow for, like CPP Uhh,what? Quote Link to comment Share on other sites More sharing options...
Wilber Posted March 31, 2016 Report Share Posted March 31, 2016 Uhh,what? Did you miss the bit about 1.1 trillion spent servicing the debt between 1974 and 2010 without any principle being reduced, or the fact that the 30 billion being spent borrowed is basically the same as the amount being spent to service our existing debt? I don't think we are borrowing to maintain CPP. Quote Link to comment Share on other sites More sharing options...
Smallc Posted March 31, 2016 Report Share Posted March 31, 2016 We're not borrowing for the CPP. That's why I said what? Quote Link to comment Share on other sites More sharing options...
dre Posted March 31, 2016 Report Share Posted March 31, 2016 Did you miss the bit about 1.1 trillion spent servicing the debt between 1974 and 2010 without any principle being reduced, or the fact that the 30 billion being spent borrowed is basically the same as the amount being spent to service our existing debt? Those numbers are not meaningful without context and they don't advance any argument that we should not have spent that borrowed money. You have no coherent argument... just some numbers you barely understand. Quote Link to comment Share on other sites More sharing options...
Wilber Posted March 31, 2016 Report Share Posted March 31, 2016 Those numbers are not meaningful without context and they don't advance any argument that we should not have spent that borrowed money. You have no coherent argument... just some numbers you barely understand. What is it you don't understand about over 30 billion having to come out government revenues every year to pay interest on debt that will never be paid off and is increasing? Quote Link to comment Share on other sites More sharing options...
Argus Posted March 31, 2016 Author Report Share Posted March 31, 2016 (edited) We're not borrowing for the CPP. That's why I said what? The point I made was that CPP was established by the boomer generation, but they didn't want to pay for it. So they didn't. That was why, starting in 1986, contribution rates were basically tripled. The system went from contribution rates way too low to pay for the pensions, to contribution rates higher than needed for the pensions people will get. The higher rates are needed to pay for the pensions of the boomers, who chose not to contribute much for their own pensions Their children and grandchildren have to pay higher rates for that. Just like the children of boomers have to pay for the rest of the debts the boomers ran up for things they wanted but chose not to pay for. OAS again has no contributions at all, so the boomers again didn't have to pay for them, and the debt which we will be running up, as the OAS payments drastically increase in the coming years, will come from general revenues - paid for by the children and grandchildren of the boomers. Edited March 31, 2016 by Argus Quote Link to comment Share on other sites More sharing options...
Wilber Posted April 1, 2016 Report Share Posted April 1, 2016 (edited) Those numbers are not meaningful without context and they don't advance any argument that we should not have spent that borrowed money. Some of it we probably should and some of it we certainly shouldn't but it just points out the folly of expanding entitlements when the money isn't there to pay for them, or on the promise that we might be able to pay for them in future. Edited April 1, 2016 by Wilber Quote Link to comment Share on other sites More sharing options...
Wilber Posted April 1, 2016 Report Share Posted April 1, 2016 (edited) The point I made was that CPP was established by the boomer generation, but they didn't want to pay for it. So they didn't. That was why, starting in 1986, contribution rates were basically tripled. The system went from contribution rates way too low to pay for the pensions, to contribution rates higher than needed for the pensions people will get. The higher rates are needed to pay for the pensions of the boomers, who chose not to contribute much for their own pensions Their children and grandchildren have to pay higher rates for that. Just like the children of boomers have to pay for the rest of the debts the boomers ran up for things they wanted but chose not to pay for. OAS again has no contributions at all, so the boomers again didn't have to pay for them, and the debt which we will be running up, as the OAS payments drastically increase in the coming years, will come from general revenues - paid for by the children and grandchildren of the boomers. Actually not. The Canada Pension Plan which became OAS was introduced in 1928. CPP started in 1966. All except the first two years of boomers hadn't got out of high school yet. Pearson, Trudeau, Diefenbaker etc were not boomers. Edited April 1, 2016 by Wilber Quote Link to comment Share on other sites More sharing options...
Wilber Posted April 1, 2016 Report Share Posted April 1, 2016 BTW, the first PM from the boomer generation was Kim Campbell. Quote Link to comment Share on other sites More sharing options...
Wilber Posted April 1, 2016 Report Share Posted April 1, 2016 Just for the record, there have been only two PM's who fit the age criteria of boomers. Campbell and Harper. Quote Link to comment Share on other sites More sharing options...
msj Posted April 1, 2016 Report Share Posted April 1, 2016 (edited) The point I made was that CPP was established by the boomer generation, but they didn't want to pay for it. So they didn't. That was why, starting in 1986, contribution rates were basically tripled..Not to pile on here, and not to detract from Wilber's excellent facts, but the CPP started going up in 1986 from 1.8% to, gasp, 1.9% in 1987. They kept going up at .10 % per year until 1996. Then they went up .2% for a bit and then escalated some more until they hit 4.95% in 2003. That's only half the rate, of course. Employers pay the other half. Self employed people such as myself pay both portions (9.9%). The point being, that many baby boomers peak earning years were/are during the period 1986 to now. So "they" are paying in quite a bit to the CPP and the reason there will be money in the CPP for me (gen x) is thanks to them (and Mulroney and Chrétien for increasing the rates). ---------------- Had an interesting conversation with a nice baby boomer couple this afternoon. As I plotted a way for them to get $10k of tax free GIS pension payments prior to them hitting their RRIF age (which will see GIS clawed back at a rate of 50%) they made an interesting point: Her mother, who I had just completed the final estate return, did very well over the years living off of GIC's during retirement. What's interesting was this: baby boomers got to pay high interest rates during the 80's and 90's. Now as the baby boomers retire, their kids get the benefits of low interest rates while the baby boomers earn diddly squat. Of course, life isn't fair, so boo hoo hoo etc.... Some people, for example, were born during a time in which they suffered through a Great Depression and then served in a world war. Not everyone in the world is born lucky, but for those of us born in Canada, all of us have been. Edited April 1, 2016 by msj Quote Link to comment Share on other sites More sharing options...
BC_chick Posted April 1, 2016 Report Share Posted April 1, 2016 BTW, the first PM from the boomer generation was Kim Campbell. Wow, I did not realise that. I just googled after reading your post and you're right, Chrétien and Martin, both were born in the 30's! I had no idea they were that old, Chrétien looks fantastic. Quote Link to comment Share on other sites More sharing options...
Argus Posted April 1, 2016 Author Report Share Posted April 1, 2016 Not to pile on here, and not to detract from Wilber's excellent facts, but the CPP started going up in 1986 from 1.8% to, gasp, 1.9% in 1987. They kept going up at .10 % per year until 1996. Then they went up .2% for a bit and then escalated some more until they hit 4.95% in 2003. That's only half the rate, of course. Employers pay the other half. Self employed people such as myself pay both portions (9.9%). The point being, that many baby boomers peak earning years were/are during the period 1986 to now. And they started paying more for them in 1986, but the amount they were putting in has never matched what they're going to get out because they've still got 25 years of underpayments behind them. And no one is paying for OAS. As the outlays rise when the bulk of the boomers retire the payments will be from general taxes collected from their children and grandchildren. So "they" are paying in quite a bit to the CPP and the reason there will be money in the CPP for me (gen x) is thanks to them (and Mulroney and Chrétien for increasing the rates). No, the reason the CPP will have money is due to the drastically increased payments, which, granted, they did pay in the latter part of their careers. But you (and your employers) will be paying that your entire working life, and the amount collected needs to be higher than it othwerwise would be to make up for the relatively free ride the boomers got from 1966 till into the 1990s. Quote Link to comment Share on other sites More sharing options...
Wilber Posted April 1, 2016 Report Share Posted April 1, 2016 (edited) There are other factors such as interest rates. The reduced ability to grow money has affected all retirement savings plans, be they CCP, RSP's RRSP's, TFSA's or any others. During the eighties GIC's were paying over 10% which made the CCP fund grow much quicker than is possible with today's interest rates. But then Boomers were paying between 15 and 20% interest on their mortgages at the time. You may think 10% plus interest on term deposits to be a free ride but 20% mortgage rates definitely were not. I know people who just walked away from their homes in the mid and late eighties because when rates went sky high, they were no longer worth what they were mortgaged for and they couldn't afford to renew at double the rate anyway. That's what you get when you have any kind of bubble and the cost of borrowing goes up dramatically. Edited April 1, 2016 by Wilber Quote Link to comment Share on other sites More sharing options...
Bonam Posted April 1, 2016 Report Share Posted April 1, 2016 (edited) You may think 10% plus interest on term deposits to be a free ride but 20% mortgage rates definitely were not. I know people who just walked away from their homes in the mid and late eighties because when rates went sky high, they were no longer worth what they were mortgaged for and they couldn't afford to renew at double the rate anyway. That's what you get when you have any kind of bubble and the cost of borrowing goes up dramatically. What I'd give for 20% mortgage rates. That would cut the selling price of housing by a factor of 4, meaning anyone who can afford the downpayment at today's crazy ass prices could instead just buy all cash. Nothing would help housing affordability like having mortgage rates go up to the double digits. The same homes that are selling for $2 million today were less than $100k when mortgage rates were 20%. Edited April 1, 2016 by Bonam Quote Link to comment Share on other sites More sharing options...
Wilber Posted April 1, 2016 Report Share Posted April 1, 2016 (edited) What I'd give for 20% mortgage rates. That would cut the selling price of housing by a factor of 4, meaning anyone who can afford the downpayment at today's crazy ass prices could instead just buy all cash. Nothing would help housing affordability like having mortgage rates go up to the double digits. The same homes that are selling for $2 million today were less than $100k when mortgage rates were 20%. There would be a glut for awhile as all the repossessed homes worked their way through the system. How many people do you think would or could renew a mortgage on a home that is worth half of the mortgage it is carrying when they have to renew at four times the interest rate. Housing prices are supply and demand, interest rates are only part of it. Right now in Abbotsford, 90% of the for sale signs I see have sold stickers slapped on them. Sure I could get top dollar for my place, but now where do I go. Edited April 1, 2016 by Wilber Quote Link to comment Share on other sites More sharing options...
Bonam Posted April 1, 2016 Report Share Posted April 1, 2016 There would be a glut for awhile as all the repossessed homes worked their way through the system. How many people do you think would or could renew a mortgage on a home that is worth half of the mortgage it is carrying when they have to renew at four times the interest rate. Then they'd be left without the ability to afford to own a home. Just like all the millions of people today who see homes priced at values greater than their entire lifetime of income is likely to be. Housing prices are supply and demand, interest rates are only part of it. Housing prices are completely distorted by government policy, which seeks to artificially inflate the prices of homes as much as possible for the benefit of current owners while disenfranchising younger generations. It is nowhere close to any kind of free market. People who think they are entitled to the benefits of housing property that is worth 10x what they paid for it while all future generations are priced out forever deserve a swift kick in the ass. Quote Link to comment Share on other sites More sharing options...
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