Saturday, January 28, 2012

On unequalization

As usual, the Cons' latest attack on social programs - this time the Old Age Security which has played a key role in lifting Canadian seniors out of poverty - is supposedly based on some inescapable lack of fiscal capacity to provide a reasonable standard of living. But the truth is that there's a rather simple choice to be made as to what priorities to fund - and the Cons are squarely on the wrong side of it.

Let's consider the Harper spinmeisters' doomsday scenario as to what OAS might cost by 2030. The Cons' estimated total cost is about $108 billion. But based on Statistics Canada's medium-case demographic estimates, seniors ages 65 and 66 will make up only 11.5% of the total population aged 65 and up as of 2031.

So if OAS is relatively evenly applied across the age spectrum, the savings from pushing back the retirement age for Canadians in general will amount to 11.5% of $108 billion - or just over $12 billion per year.

At the same time, the Cons plan to push through general income splitting and increases to tax-free savings accounts. And those plans - targeted squarely at large-single-income households and those wealthy enough to have $10,000 to sock away every single year - will cost...just under $12 billion per year. And unlike the Cons' numbers for OAS, that's without taking into account any growth in the size of the tax base in the meantime.

So no, cutting the OAS by applying a higher retirement age isn't a matter of necessary fiscal prudence. Instead, it's half of a large-scale plan to redistribute wealth from those who make little enough to qualify for the OAS, to those who already have money to burn. And there's no way the Cons should be allowed to balance the budget on the backs of would-be retirees without answering for the fact that their goal is to hand that same money to those who need it least.

Update: Dave and Jymn have more.
[Edit: fixed wording.]

4 comments:

  1. Anonymous5:00 p.m.

    Just to add to this discussion.... Harper is going around World Economic Forum at Davos using Europe's economic problems to justify cuts to Canadian old age benefits.

    http://www.theglobeandmail.com/news/politics/harpers-use-of-europes-debt-crisis-as-backdrop-for-speech-no-coincidence/article2318288/

    But recent data seriously calls into question the effectiviness of austerity policies in UK and other European nations. In the UK austerity policies are contributing to a slump that is longer and virtually as deep as the slump the UK experienced during the great depression

    http://krugman.blogs.nytimes.com/2012/01/28/the-worse-than-club/

    So not only is Harper attempting to offer tax give aways to the wealthy while balancing the budget on the backs of seniors, the justification for his plan is based on a policy approach that is proving to be an economic disaster in Europe.

    ReplyDelete
  2. Nadine Lumley12:07 p.m.

    <span>And three, because it seems clear to me that the object of this exercise is to terrify us ALL, to soften us up for what promises to be a bloody budget.</span>
    <span> </span>
    <span>So in order to try to panic the population into going along with their insane scheme, they're prepared to terrorize seniors all over the country. Because they know they're vulnerable, and can be easily scared. And fear is contagious.</span>
    <span> </span>
    <span>http://montrealsimon.blogspot.com/2012/01/real-reason-cons-are-scaring-seniors.html</span>
    <span> </span>
    <span>♥</span>

    ReplyDelete
  3. Nadine Lumley12:11 p.m.

    <span>And three, because it seems clear to me that the object of this exercise is to terrify us ALL, to soften us up for what promises to be a bloody budget.</span>

    <span>So in order to try to panic the population into going along with their insane scheme, they're prepared to terrorize seniors all over the country. Because they know they're vulnerable, and can be easily scared. And fear is contagious.</span>

    <span>http://montrealsimon.blogspot.com/2012/01/real-reason-cons-are-scaring-seniors.html</span>

    ReplyDelete
  4. Nadine Lumley12:12 p.m.

    I tried two times to clean it up, ????

    ReplyDelete