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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.