Relay-Version: version B 2.10 5/3/83; site utzoo.UUCP Posting-Version: version B 2.10.1 6/24/83; site ubc-vision.CDN Path: utzoo!utcsri!ubc-vision!woodham From: woodham@ubc-vision.CDN (Bob Woodham) Newsgroups: can.politics Subject: indexing Message-ID: <990@ubc-vision.CDN> Date: Tue, 2-Jul-85 19:15:21 EDT Article-I.D.: ubc-visi.990 Posted: Tue Jul 2 19:15:21 1985 Date-Received: Wed, 3-Jul-85 03:20:25 EDT Organization: UBC Computational Vision Lab, Vancouver, B.C., Canada Lines: 21 The changing age distribution of the population seems to me to be a straw-man argument. The Canada (Quebec) pension plan could always be maintained on a sound financial basis. After all, what is actuarial mathematics for? (We might not like what it costs, but that is another matter.) To me, the central flaw is that government absorbs pension contributions into general revenue. In effect, the government borrows pension contributions for its immediate purposes without provision for eventual pay out. (This is a clear conflict of interest position that would not be tolerated in a private pension plan.) Cutting pensions should not be a fiscal option equivalent to raising taxes. It is dangerous when inflation is in a government's own self interest. Two obvious points deserve restating. First, the real cost of past deficits drops as inflation increases. Second, all of us are shuffled along into higher tax brackets in times of inflation and wage rates that keep pace. Thus, there is little incentive for government to fight inflation. I am in favour a full indexing of pensions and income tax personal exemptions simply because I don't want to reward government for inflationary policies.