UnThreaded | Threaded | Whole Thread (1) | Ignore Thread Prev Thread | Prev | Next | Next Thread
Author: MrCheeryO Big funky green star, 20000 posts Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 58870  
Subject: Canada Goes Steady State Date: 2/5/2007 1:10 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 4
A key to this successful solution is to quit running the scam where taxes are removed from paychecks to be blown on every assinine wish-list of some Congress-spendthrift. By law, the taxes are invested in real things, and not Bushbuck IOUs, for example. Oh look, I own 1000 shares of Berkshire Hathaway A, bought with my taxes, and so on.

http://www.cppib.ca/

A FAIR APPROACH TO FUNDING
...Continuing to finance the Plan on a pay-as-you-go basis would have meant imposing a heavy financial burden on Canadians in the workforce 25 years down the road, which was deemed unacceptable by the federal and provincial governments. Therefore, in 1997, they agreed instead to change the funding approach of the Plan to a hybrid of pay-as-you-go and full funding. Under full funding, each generation pays for its own benefits.

Steady-state Financing
To reduce the burden on future generations, the federal and provincial governments introduced “steady-state” financing as part of the 1997 reform agreement. This approach requires that contribution rates be set no lower than the lowest rate expected to ensure the long-term financial stability of the Plan without recourse to further rate increases. At the time of the reforms, this was determined to be
9.9 percent. Therefore, under steady-state financing, the contribution rate was scheduled to increase incrementally (from 5.6 percent in 1996) to 9.9 percent in 2003, and to remain at this level thereafter.

According to the Chief Actuary of Canada, steadystate financing will generate a level of contributions that exceeds the benefits paid until 2022. Funds not immediately required to pay benefits will changes agreed to in 1997 have reduced the relative size of the Plan's unfunded liability in a manner that is fair across generations. Moving to full-funding, which would have eventually eliminated the unfunded liability would have created unfairness across the generations.
http://www.hrsdc.gc.ca/en/isp/pub/cpp/report/2005/annrpt2005.pdf

Other key is this:

...Canada recorded a C$13.2 billion ($11.6 billion) budget surplus in the previous fiscal year, and since 1997 has used more than C$80 billion in extra money to buy back government debt....
http://www.bloomberg.com/apps/news?pid=20601082&sid=aFfCfD4KBkxQ&refer=canada

Very simple. So: 1. You can't be running no tax cut scams http://www.whitehouse.gov/news/releases/2001/02/20010228.html and 2. You have to really want to solve the problem, and not just be The Great Divider. Obviously, not going to happen here any time soon. P-Box wars! How exciting! And Enlightening!
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (1) | Ignore Thread Prev Thread | Prev | Next | Next Thread

Announcements

Post of the Day:
Value Hounds

Medallion Financial: TAXI!
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement