More on the CPP and its saviours

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2014-02-04 More on the CPP

I can’t walk away from this subject. Let me give it a few more thoughts.

I have to admit to my complacency about the subject. Before I received the flyer from Peggy Nash, I did not pay much attention to the CPP. I knew that the benefits it provides are grossly inadequate, I knew that I will not be able to survive on it so about ten years ago (and at least ten years too late) I started saving aggressively, understanding clearly that I cannot count on the government to take care of me in my old age. I also knew that most government pension systems around the world are in trouble, I knew that they are mostly thinly veiled Ponzi schemes where current contributions are paying for current benefits based on the assumption that there will always be enough current income to pay the cost of the earlier promises. I also knew about the several experiences around the world trying to solve the problem by privatising the pension systems.
I knew that I cannot count on it; I knew that a private option would work better, yet I still relaxed into the comfortable Canadian complacency thinking that it is not that bad. It is something that the truly needy can count on and ours is in a much better shape than most. It wasn’t until I looked at it that I realized how bad it is. The argument of Rankin was that the CPP is extremely well managed by the Canada Pension Plan Investment Board (CPPIB); with 200 billion dollars it is one of the biggest investment funds in Canada. It is doing very well, which is why we have to save it.
I don’t understand what’s going on in the mind of people like Murray Rankin. Does he expect us not to notice the problem with the logic? Does he really believe that nobody will check? That nobody will do the calculation I did in my last post? That nobody will look at the graph on the CPPIB web site?

More on the CPP-1

The graph that does not show investment history prior to 2009 but shows stellar projections for the future without a hint of the effect of the retiring baby boom generation or the point in 2021 when the number of beneficiaries will surpass the number contributors?
The 5 year plans of the communists did not look this good. Or more believable.

To be fair to the system, I must say that it is in a much better shape today than it was before the reform in 1997. Up to that point it was a typical pay as you go Ponzi scheme. Today it has relative independence and a slowly growing reserve fund so it is, at this point, relying only to the extent of 80% on current contributions. We could spend more time analyzing and debating the pros and cons of the existing system, but if we accept the premises of its existence, then there is no crises. I may have doubt about its promises, problems with the way its value is calculated and reported, I may argue for its elimination entirely, but I cannot see the crisis the NDP wants to save us from. I could say that I don’t get it, but actually, I just can’t believe it.
I can’t believe that these advocates are stupid enough to believe their own spin. I believe they don’t. I think they are just working on the overall agenda, increasing the size of the government a few percent tax increase at a time, shifting the balance of power just a few degrees from the individual to the state. It’s never about the poor, it is never about justice, it is always about getting more money and thus more power into their own hands. Which party is actually in power when this happens is immaterial. As long as the state grows, the socialists are winning. Every extra percentage point of our GDP that gets in the hands of the state or under its direct control is a small victory for the socialists.

It is said that the difference between a Libertarian and an Anarcho-Capitalist is six months. I can definitely see the point, even if it takes much longer for me, even if I may never get there. Once you really get into libertarian ideas, with any intellectual honesty you will find that the arguments of the Anarcho-Capitalists represent the only truly coherent and consistent application of the principles.
My only beef with them is that they do not have a clue how to get there.

I believe that the world based on absolute individual freedom (as understood by the Anarcho-capitalists) or the world of absolute collectivism (as understood by the communists), represent only the idealized expressions of their respective principles. They are not real; they cannot exist in their idealized forms.

As I was looking at the three socialists, I was wondering what makes the difference between them and the bloodiest of communists. Not much, I’m afraid. The difference is just a matter of degree.
These three were the perfect examples of the communist archetypes: the cynical, corrupt careerist, the exuberant but extremely naïve and ignorant cheer leader and the pious fanatic. This last one is the most dangerous type. I can perfectly picture her signing the arrest warrants for the likes of me.  Regardless of who they are and what they represent, they seem to understand that the road to serfdom is a slow process with lots of deception, propaganda and manipulation. (Read my review of “The Iron Curtain”)

Libertarianism and socialism are directions with unreachable, hypothetical end points. What matters is the process leading in either direction. Socialists seem to understand this much better than libertarians. They use the ideology to justify the small steps they take on the road to ultimate power.

Truth, logic, morality and evidence are all on the side of freedom yet libertarians are losing the battle to the underhanded, sleazy propaganda of the socialists because their focus is on the righteousness of their ideals and not on the pragmatic realities of the processes that may turn them into reality.

Our ideas are fine. Can we also start focusing on the process?

One reply

  1. George Dance says:
    I’ve enjoyed reading your series on the CPP, as well as some of your other articles (on the Rob Ford saga, for instance). I’ve added you to my weblog’s blogroll.

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