the financial crisis has forced Canadians to come to grips with the
idea that a pension may not be a promise, employee benefits are
similarly in peril.
"I find it almost incomprehensible that Nortel
LTD (long-term disability) claimants could lose their benefits, but
this is possible; let alone losing their health care and a portion of
their pensions," said Kevin Dougherty, president of Sun Life Financial
Canada, speaking at the Canadian Pension and Benefits Institute
conference.
"We saw how benefits and pensions can literally disappear in an instant."
Now people nearing retirement face a new twist.
"Millions
of people asked the questions, what if I have to leave the workforce
five or 10 years early, or what if I have to stay in the workforce five
or 10 years more."
The leading edge of baby boomers will hit age 65 next year, when each day a thousand people in Canada will retire.
"Today
with boomers age 50 to 65, with kids grown and many through school,
the question they're asking isn't 'what if I die,' it's 'what if I
live?' That saps my income and retirement savings. What if I have to
live through another financial crisis?"
Dougherty joins federal
Finance Minister Jim Flaherty and Bank of Canada governor Mark Carney
in worrying about the growing debt Canadians are piling up.
"How
can we be the only place in the developed world where real estate
prices continued to increase for the last two-and-a-half years? What
does that mean? - more and more debt for Canadians."
While
Canadians who can't resist a bargain stock up on moulding empty homes
in the United States, there is fear that the Home Equity Line Of Credit
or HELOC could do in Canada what subprime mortgages did in the U.S.
Of course, retirement won't affect all people the same.
"Women
who are widowed early in retirement actually live three years longer
(than those who aren't), and men widowed early in retirement live three
years less."
While more and more companies with underfunded
pension plans have been reducing benefits and commuted value payouts,
the malaise has spread to employment benefits. Many firms offer minimal
health-care coverage in retirement or have eliminated it, while more
and more current employees find themselves on the hook to find vision
and dental insurance.
Meanwhile, the average number of days lost annually to sickness per worker has risen from eight in 1989 to 13 in 2009.
Dougherty's
conclusion is that neither government nor lawyers will take care of an
aging workforce, "and the next generation of children is not going to
want to take care of us."
He said
there is more onus on people in the pension and benefits and human
resources areas to devise products and provide advice.
"Our
industry needs to be much more than just helping to attract and retain
employees. The financial security of millions of Canadians depends on
the work we do."
One such move is encouraging government to establish a new personal health- savings account.
"We've
been advocating something called the registered health savings plan,
where people can save money on a pre-tax basis to be used for their
health-care costs in retirement. There are other examples like critical
illness insurance. But we've got to step up to this. I think this is
going to be one of the big areas of the future."
Even
with defined contribution pension plans, where investment risk lies
with the individual, the employers can provide advice through plan
sponsors.
"Narrowing the field from 4,000 fund managers to 12 is
providing advice. Overseeing and switching out of managers is providing
advice. Setting a level of contribution and matching is providing
advice. Providing tools that ask questions and lead people to
recommendations is providing advice."
But there is need to help
educate people about financial literacy, abetting the federal
government's task force on the issue that has been touring Canadians for
submissions and will issue a report in December.
"The most
striking finding is the degree of the challenge that we have, the
surprising lack of financial literacy in the general population is
really, really striking," Dougherty said.
"There's a challenge in
literacy - reading and writing in English, because we have such large
immigration; a challenge in numeracy, lots of people don't like working
with numbers; and you layer on top of that the knowledge and skills of
financial consequences."
All this is set against a backdrop in
which the financial crisis produced severe stock market downturns that
scared individuals from investing personally, while corporations were
similarly spooked and didn't invest in technology to improve
productivity and grow their workforces.
"There
was a two-year period in which we didn't invest, and that's going to
hurt us for two to five years," said Glen Hodgson, chief economist of
the Conference Board of Canada. "Health care will soon emerge as a top
concern for Canadians. Aging is going to suck the life out of our
economy slowly."
But just as baby boomers were told 40 years ago
that the investment of the future would be "plastics," Hodgson has his
own tip: "India will be the next China, it will keep growing at eight
per cent for a number of years."
You can bet your hip replacement on it.
Finally, my favorite deflationist, Gary Shilling was interviewed on Yahoo's Teck Ticker on Monday warning us that the age of deleveraging is upon us:
Recently I wrote that the deficit-cutting projects and media campaigns sponsored by billionaire Pete Peterson all "focus on the same narrow band of options" that "reflect far-right positions," but nevertheless are usually described in the media as "moderate" and "bipartisan."
I received a response from an official at the Peterson Foundation. Out of courtesy, I will not name the person or quote their email in full. The official said that my statement was "patently untrue" and a "mischaracterization." Some of their other statements can be found below, along with my observations about them. My reply to the Foundation then follows:
Foundation: "We strongly believe that Social Security must be preserved and protected. One of the goals of the Foundation is to ensure that this vital program is strong, solvent and secure for future generations, particularly America's most vulnerable populations ... "
Peterson-funded projects have consistently given the impression that Social Security is contributing to the deficit (which it is prohibited by law from doing); that its long-term shortfall must be met primarily by benefit cuts, and only secondarily by revenues; and that it is acceptable to increase tax payments for the wealthy so gradually that it will take forty years for the payroll tax to cover the same percentage of wealth it covered more than twenty years ago.
To be fair, Peterson-funded proposals have recently included modest benefit increases for the lowest-income recipients.
Foundation: "Mr. Peterson's personal views include the need to increase benefits for the poorest Americans receiving Social Security and reduce benefits for the well-off. He has suggested that progressive benefit reforms such as progressive wage indexing, affluence testing and increasing the payroll tax cap be considered."
"Reducing benefits for the well-off" sounds reasonable - until you realize that this billionaire's definition of the "well off" includes people who earned an average of $43,000 per year during their work life. A 20-year-old who earned that average through their work life would see a 17% cut in benefits from one Peterson-backed proposal, and would see a 30% cut if they earned an average of $69,000. Under the Simpson-Bowles plan, even workers who made as little as $20,000 average would see benefit cuts starting in 2040.
As for the truly wealthy who receive Social Security benefits, the problem is that there aren't enough of them to make a difference. Remember, retirement benefits only go up to a certain amount. It sounds reasonable to say that billionaires shouldn't receive a Social Security check (although they've paid for the benefit, too). But when you calculate the number of wealthy people that would be excluded under any reasonable plan, there aren't that many of them. When you add in all the time and expense of identifying them and tracking them (How would that be done? Cross-reference IRS returns and check their bank and real estate holdings?), studies have concluded you'd spend more to find them that you would save by cutting their benefits.
Foundation: "Mr. Peterson and the Foundation have also repeatedly stated that we must consider all viable solutions from across the political spectrum if we hope to meaningfully address our fiscal challenges. As part of this process, the Foundation believes that it will be imperative that wealthier Americans contribute significantly to help stabilize our nation's finances, secure the social safety net and provide critically needed resources for education, research & development and infrastructure."
Nevertheless, a recent Peterson-backed proposal (Rivlin/Domenici) would cut both Social Security benefits and Medicare spending, which would disproportionately harm seniors who are not wealthy. The same plan would also sharply lower the top marginal tax rate, from 35% to 27%, making up the difference with a highly regressive sales tax of 6.5% and percentage limits for tax deductions that would disproportionately benefit the wealthy.
That is a "right-wing" plan by any measure. It's certainly not a plan in which "wealthier Americans contribute significantly to help stabilize our nation's finances."
My response to the Foundation follows:
____________________Dear X:
Despite your suggestion that my characterization of Mr. Peterson's views is misleading, it seems to me that the consistent themes behind every organization, study, and communications campaign Mr. Peterson has funded have been:
- An overemphasis on balancing the budget in a time of economic crisis, when stimulus is urgently needed;
- A failure to note the critical role the banking sector has played in creating today's deficits;
- The mistaken notion that the country cannot continue to provide the current level of Social Security benefits;
- A refusal to propose lifting the payroll tax cap to 100%, as polls show the public (including most Republicans) would prefer;
- A refusal to consider returning to the marginal tax rates which were applied to high incomes in recent decades;
- Proposals which would delay the process of returning the payroll to its 1980's-era level, when it covered 90% of all income as intended by the Greenspan Commission. (No liberal, that Alan Greenspan!) Some proposals funded by Mr. Peterson would delay this re-stabilization by as much as a half a century;
- Social Security proposals that give greater weight to benefit cuts than to tax increases;
- Communication campaigns designed to fuel the misconception that Social Security contributes to the general deficit; and,
- A desire to convince the public that levels of debt considered manageable in other nations pose a grave threat here.
I agree that long-term deficits are a grave and even critical problem. But these long-term debts are fueled almost exclusively by the truly staggering increases in health care costs that have been projected. Yet the projects funded by Mr. Peterson are notable for their lack of emphasis on health management programs that could contain these costs, as has been accomplished in other developed nations.
I respect Mr. Peterson's accomplishments, which have given him the ability to promote his opinions in many different ways. But these opinions, however legitimate, are normally considered right-wing. The attempt to characterize these conservative views as "bipartisan" has been very successful from a marketing point of view, but has no basis in fact as far as I can see.
Thank you for writing, and best regards -
Richard Eskow
PS: I saw that Mr. Peterson signed the Millionaire's Pledge. That's admirable, and I thank him for it.
_____________________Note: I have not yet received a reply.
bench craft company rip offCongo Siasa: <b>News</b> we missed last week
News I failed to blog on last week: The newly ordained cardinal of Kinshasa, Laurent Monsegwo, arrived in Kinshasa from Rome on Wednesday to huge acclaim. Monsengwo is usually considered to be opposed to Kabila, but rarely takes public ...
Denver Broncos <b>News</b>: Horse Tracks 12/6/10 - Mile High Report
Your daily cup of Orange and Blue Coffee....Horse Tracks!
Carnahan Camp To Fox <b>News</b>: Why Single Us Out? | TPMMuckraker
Lawyers for former Senate Candidate Robin Carnahan are arguing that the Fox News network is singling the Missouri Democrat out in its lawsuit alleging her campaign violated the network's copyrights.
bench craft company rip offCongo Siasa: <b>News</b> we missed last week
News I failed to blog on last week: The newly ordained cardinal of Kinshasa, Laurent Monsegwo, arrived in Kinshasa from Rome on Wednesday to huge acclaim. Monsengwo is usually considered to be opposed to Kabila, but rarely takes public ...
Denver Broncos <b>News</b>: Horse Tracks 12/6/10 - Mile High Report
Your daily cup of Orange and Blue Coffee....Horse Tracks!
Carnahan Camp To Fox <b>News</b>: Why Single Us Out? | TPMMuckraker
Lawyers for former Senate Candidate Robin Carnahan are arguing that the Fox News network is singling the Missouri Democrat out in its lawsuit alleging her campaign violated the network's copyrights.
bench craft company rip offCongo Siasa: <b>News</b> we missed last week
News I failed to blog on last week: The newly ordained cardinal of Kinshasa, Laurent Monsegwo, arrived in Kinshasa from Rome on Wednesday to huge acclaim. Monsengwo is usually considered to be opposed to Kabila, but rarely takes public ...
Denver Broncos <b>News</b>: Horse Tracks 12/6/10 - Mile High Report
Your daily cup of Orange and Blue Coffee....Horse Tracks!
Carnahan Camp To Fox <b>News</b>: Why Single Us Out? | TPMMuckraker
Lawyers for former Senate Candidate Robin Carnahan are arguing that the Fox News network is singling the Missouri Democrat out in its lawsuit alleging her campaign violated the network's copyrights.
bench craft company rip off
Congo Siasa: <b> Noticias </ b> que nos perdimos weekNews último que no blog la semana pasada: El recién ordenado cardenal de Kinshasa, Laurent Monsegwo, llegó a Kinshasa desde Roma el miércoles con gran éxito enorme. Monsengwo es generalmente considerado como oposición a Kabila, pero rara vez se toma pública ...
Denver Broncos <b> Noticias </ b>: carreras de caballos 12/6/10 - Mile High ReportYour taza diaria de café y naranja azul .... carreras de caballos!
Campamento Carnahan Para Fox News <b> </ b>: ¿Por qué solo nosotros fuera? | TPMMuckrakerLawyers para el ex candidato al Senado Robin Carnahan argumentan que la cadena Fox News es singularizar el demócrata de Missouri en su demanda alegando su campaña violado los derechos de autor de la red.
bench craft company rip offCongo Siasa: <b>News</b> we missed last week
News I failed to blog on last week: The newly ordained cardinal of Kinshasa, Laurent Monsegwo, arrived in Kinshasa from Rome on Wednesday to huge acclaim. Monsengwo is usually considered to be opposed to Kabila, but rarely takes public ...
Denver Broncos <b>News</b>: Horse Tracks 12/6/10 - Mile High Report
Your daily cup of Orange and Blue Coffee....Horse Tracks!
Carnahan Camp To Fox <b>News</b>: Why Single Us Out? | TPMMuckraker
Lawyers for former Senate Candidate Robin Carnahan are arguing that the Fox News network is singling the Missouri Democrat out in its lawsuit alleging her campaign violated the network's copyrights.
bench craft company rip off
While
the financial crisis has forced Canadians to come to grips with the
idea that a pension may not be a promise, employee benefits are
similarly in peril.
"I find it almost incomprehensible that Nortel
LTD (long-term disability) claimants could lose their benefits, but
this is possible; let alone losing their health care and a portion of
their pensions," said Kevin Dougherty, president of Sun Life Financial
Canada, speaking at the Canadian Pension and Benefits Institute
conference.
"We saw how benefits and pensions can literally disappear in an instant."
Now people nearing retirement face a new twist.
"Millions
of people asked the questions, what if I have to leave the workforce
five or 10 years early, or what if I have to stay in the workforce five
or 10 years more."
The leading edge of baby boomers will hit age 65 next year, when each day a thousand people in Canada will retire.
"Today
with boomers age 50 to 65, with kids grown and many through school,
the question they're asking isn't 'what if I die,' it's 'what if I
live?' That saps my income and retirement savings. What if I have to
live through another financial crisis?"
Dougherty joins federal
Finance Minister Jim Flaherty and Bank of Canada governor Mark Carney
in worrying about the growing debt Canadians are piling up.
"How
can we be the only place in the developed world where real estate
prices continued to increase for the last two-and-a-half years? What
does that mean? - more and more debt for Canadians."
While
Canadians who can't resist a bargain stock up on moulding empty homes
in the United States, there is fear that the Home Equity Line Of Credit
or HELOC could do in Canada what subprime mortgages did in the U.S.
Of course, retirement won't affect all people the same.
"Women
who are widowed early in retirement actually live three years longer
(than those who aren't), and men widowed early in retirement live three
years less."
While more and more companies with underfunded
pension plans have been reducing benefits and commuted value payouts,
the malaise has spread to employment benefits. Many firms offer minimal
health-care coverage in retirement or have eliminated it, while more
and more current employees find themselves on the hook to find vision
and dental insurance.
Meanwhile, the average number of days lost annually to sickness per worker has risen from eight in 1989 to 13 in 2009.
Dougherty's
conclusion is that neither government nor lawyers will take care of an
aging workforce, "and the next generation of children is not going to
want to take care of us."
He said
there is more onus on people in the pension and benefits and human
resources areas to devise products and provide advice.
"Our
industry needs to be much more than just helping to attract and retain
employees. The financial security of millions of Canadians depends on
the work we do."
One such move is encouraging government to establish a new personal health- savings account.
"We've
been advocating something called the registered health savings plan,
where people can save money on a pre-tax basis to be used for their
health-care costs in retirement. There are other examples like critical
illness insurance. But we've got to step up to this. I think this is
going to be one of the big areas of the future."
Even
with defined contribution pension plans, where investment risk lies
with the individual, the employers can provide advice through plan
sponsors.
"Narrowing the field from 4,000 fund managers to 12 is
providing advice. Overseeing and switching out of managers is providing
advice. Setting a level of contribution and matching is providing
advice. Providing tools that ask questions and lead people to
recommendations is providing advice."
But there is need to help
educate people about financial literacy, abetting the federal
government's task force on the issue that has been touring Canadians for
submissions and will issue a report in December.
"The most
striking finding is the degree of the challenge that we have, the
surprising lack of financial literacy in the general population is
really, really striking," Dougherty said.
"There's a challenge in
literacy - reading and writing in English, because we have such large
immigration; a challenge in numeracy, lots of people don't like working
with numbers; and you layer on top of that the knowledge and skills of
financial consequences."
All this is set against a backdrop in
which the financial crisis produced severe stock market downturns that
scared individuals from investing personally, while corporations were
similarly spooked and didn't invest in technology to improve
productivity and grow their workforces.
"There
was a two-year period in which we didn't invest, and that's going to
hurt us for two to five years," said Glen Hodgson, chief economist of
the Conference Board of Canada. "Health care will soon emerge as a top
concern for Canadians. Aging is going to suck the life out of our
economy slowly."
But just as baby boomers were told 40 years ago
that the investment of the future would be "plastics," Hodgson has his
own tip: "India will be the next China, it will keep growing at eight
per cent for a number of years."You can bet your hip replacement on it.
Finally, my favorite deflationist, Gary Shilling was interviewed on Yahoo's Teck Ticker on Monday warning us that the age of deleveraging is upon us:
Recently I wrote that the deficit-cutting projects and media campaigns sponsored by billionaire Pete Peterson all "focus on the same narrow band of options" that "reflect far-right positions," but nevertheless are usually described in the media as "moderate" and "bipartisan."
I received a response from an official at the Peterson Foundation. Out of courtesy, I will not name the person or quote their email in full. The official said that my statement was "patently untrue" and a "mischaracterization." Some of their other statements can be found below, along with my observations about them. My reply to the Foundation then follows:
Foundation: "We strongly believe that Social Security must be preserved and protected. One of the goals of the Foundation is to ensure that this vital program is strong, solvent and secure for future generations, particularly America's most vulnerable populations ... "
Peterson-funded projects have consistently given the impression that Social Security is contributing to the deficit (which it is prohibited by law from doing); that its long-term shortfall must be met primarily by benefit cuts, and only secondarily by revenues; and that it is acceptable to increase tax payments for the wealthy so gradually that it will take forty years for the payroll tax to cover the same percentage of wealth it covered more than twenty years ago.
To be fair, Peterson-funded proposals have recently included modest benefit increases for the lowest-income recipients.
Foundation: "Mr. Peterson's personal views include the need to increase benefits for the poorest Americans receiving Social Security and reduce benefits for the well-off. He has suggested that progressive benefit reforms such as progressive wage indexing, affluence testing and increasing the payroll tax cap be considered."
"Reducing benefits for the well-off" sounds reasonable - until you realize that this billionaire's definition of the "well off" includes people who earned an average of $43,000 per year during their work life. A 20-year-old who earned that average through their work life would see a 17% cut in benefits from one Peterson-backed proposal, and would see a 30% cut if they earned an average of $69,000. Under the Simpson-Bowles plan, even workers who made as little as $20,000 average would see benefit cuts starting in 2040.
As for the truly wealthy who receive Social Security benefits, the problem is that there aren't enough of them to make a difference. Remember, retirement benefits only go up to a certain amount. It sounds reasonable to say that billionaires shouldn't receive a Social Security check (although they've paid for the benefit, too). But when you calculate the number of wealthy people that would be excluded under any reasonable plan, there aren't that many of them. When you add in all the time and expense of identifying them and tracking them (How would that be done? Cross-reference IRS returns and check their bank and real estate holdings?), studies have concluded you'd spend more to find them that you would save by cutting their benefits.
Foundation: "Mr. Peterson and the Foundation have also repeatedly stated that we must consider all viable solutions from across the political spectrum if we hope to meaningfully address our fiscal challenges. As part of this process, the Foundation believes that it will be imperative that wealthier Americans contribute significantly to help stabilize our nation's finances, secure the social safety net and provide critically needed resources for education, research & development and infrastructure."
Nevertheless, a recent Peterson-backed proposal (Rivlin/Domenici) would cut both Social Security benefits and Medicare spending, which would disproportionately harm seniors who are not wealthy. The same plan would also sharply lower the top marginal tax rate, from 35% to 27%, making up the difference with a highly regressive sales tax of 6.5% and percentage limits for tax deductions that would disproportionately benefit the wealthy.
That is a "right-wing" plan by any measure. It's certainly not a plan in which "wealthier Americans contribute significantly to help stabilize our nation's finances."
My response to the Foundation follows:
____________________Dear X:
Despite your suggestion that my characterization of Mr. Peterson's views is misleading, it seems to me that the consistent themes behind every organization, study, and communications campaign Mr. Peterson has funded have been:
- An overemphasis on balancing the budget in a time of economic crisis, when stimulus is urgently needed;
- A failure to note the critical role the banking sector has played in creating today's deficits;
- The mistaken notion that the country cannot continue to provide the current level of Social Security benefits;
- A refusal to propose lifting the payroll tax cap to 100%, as polls show the public (including most Republicans) would prefer;
- A refusal to consider returning to the marginal tax rates which were applied to high incomes in recent decades;
- Proposals which would delay the process of returning the payroll to its 1980's-era level, when it covered 90% of all income as intended by the Greenspan Commission. (No liberal, that Alan Greenspan!) Some proposals funded by Mr. Peterson would delay this re-stabilization by as much as a half a century;
- Social Security proposals that give greater weight to benefit cuts than to tax increases;
- Communication campaigns designed to fuel the misconception that Social Security contributes to the general deficit; and,
- A desire to convince the public that levels of debt considered manageable in other nations pose a grave threat here.
I agree that long-term deficits are a grave and even critical problem. But these long-term debts are fueled almost exclusively by the truly staggering increases in health care costs that have been projected. Yet the projects funded by Mr. Peterson are notable for their lack of emphasis on health management programs that could contain these costs, as has been accomplished in other developed nations.
I respect Mr. Peterson's accomplishments, which have given him the ability to promote his opinions in many different ways. But these opinions, however legitimate, are normally considered right-wing. The attempt to characterize these conservative views as "bipartisan" has been very successful from a marketing point of view, but has no basis in fact as far as I can see.
Thank you for writing, and best regards -
Richard Eskow
PS: I saw that Mr. Peterson signed the Millionaire's Pledge. That's admirable, and I thank him for it.
_____________________Note: I have not yet received a reply.
bench craft company rip offCongo Siasa: <b>News</b> we missed last week
News I failed to blog on last week: The newly ordained cardinal of Kinshasa, Laurent Monsegwo, arrived in Kinshasa from Rome on Wednesday to huge acclaim. Monsengwo is usually considered to be opposed to Kabila, but rarely takes public ...
Denver Broncos <b>News</b>: Horse Tracks 12/6/10 - Mile High Report
Your daily cup of Orange and Blue Coffee....Horse Tracks!
Carnahan Camp To Fox <b>News</b>: Why Single Us Out? | TPMMuckraker
Lawyers for former Senate Candidate Robin Carnahan are arguing that the Fox News network is singling the Missouri Democrat out in its lawsuit alleging her campaign violated the network's copyrights.
bench craft company rip offCongo Siasa: <b>News</b> we missed last week
News I failed to blog on last week: The newly ordained cardinal of Kinshasa, Laurent Monsegwo, arrived in Kinshasa from Rome on Wednesday to huge acclaim. Monsengwo is usually considered to be opposed to Kabila, but rarely takes public ...
Denver Broncos <b>News</b>: Horse Tracks 12/6/10 - Mile High Report
Your daily cup of Orange and Blue Coffee....Horse Tracks!
Carnahan Camp To Fox <b>News</b>: Why Single Us Out? | TPMMuckraker
Lawyers for former Senate Candidate Robin Carnahan are arguing that the Fox News network is singling the Missouri Democrat out in its lawsuit alleging her campaign violated the network's copyrights.
bench craft company rip offCongo Siasa: <b>News</b> we missed last week
News I failed to blog on last week: The newly ordained cardinal of Kinshasa, Laurent Monsegwo, arrived in Kinshasa from Rome on Wednesday to huge acclaim. Monsengwo is usually considered to be opposed to Kabila, but rarely takes public ...
Denver Broncos <b>News</b>: Horse Tracks 12/6/10 - Mile High Report
Your daily cup of Orange and Blue Coffee....Horse Tracks!
Carnahan Camp To Fox <b>News</b>: Why Single Us Out? | TPMMuckraker
Lawyers for former Senate Candidate Robin Carnahan are arguing that the Fox News network is singling the Missouri Democrat out in its lawsuit alleging her campaign violated the network's copyrights.
bench craft company rip offCongo Siasa: <b>News</b> we missed last week
News I failed to blog on last week: The newly ordained cardinal of Kinshasa, Laurent Monsegwo, arrived in Kinshasa from Rome on Wednesday to huge acclaim. Monsengwo is usually considered to be opposed to Kabila, but rarely takes public ...
Denver Broncos <b>News</b>: Horse Tracks 12/6/10 - Mile High Report
Your daily cup of Orange and Blue Coffee....Horse Tracks!
Carnahan Camp To Fox <b>News</b>: Why Single Us Out? | TPMMuckraker
Lawyers for former Senate Candidate Robin Carnahan are arguing that the Fox News network is singling the Missouri Democrat out in its lawsuit alleging her campaign violated the network's copyrights.
bench craft company rip offCongo Siasa: <b>News</b> we missed last week
News I failed to blog on last week: The newly ordained cardinal of Kinshasa, Laurent Monsegwo, arrived in Kinshasa from Rome on Wednesday to huge acclaim. Monsengwo is usually considered to be opposed to Kabila, but rarely takes public ...
Denver Broncos <b>News</b>: Horse Tracks 12/6/10 - Mile High Report
Your daily cup of Orange and Blue Coffee....Horse Tracks!
Carnahan Camp To Fox <b>News</b>: Why Single Us Out? | TPMMuckraker
Lawyers for former Senate Candidate Robin Carnahan are arguing that the Fox News network is singling the Missouri Democrat out in its lawsuit alleging her campaign violated the network's copyrights.
bench craft company rip offCongo Siasa: <b>News</b> we missed last week
News I failed to blog on last week: The newly ordained cardinal of Kinshasa, Laurent Monsegwo, arrived in Kinshasa from Rome on Wednesday to huge acclaim. Monsengwo is usually considered to be opposed to Kabila, but rarely takes public ...
Denver Broncos <b>News</b>: Horse Tracks 12/6/10 - Mile High Report
Your daily cup of Orange and Blue Coffee....Horse Tracks!
Carnahan Camp To Fox <b>News</b>: Why Single Us Out? | TPMMuckraker
Lawyers for former Senate Candidate Robin Carnahan are arguing that the Fox News network is singling the Missouri Democrat out in its lawsuit alleging her campaign violated the network's copyrights.
bench craft company rip off
While
the financial crisis has forced Canadians to come to grips with the
idea that a pension may not be a promise, employee benefits are
similarly in peril.
"I find it almost incomprehensible that Nortel
LTD (long-term disability) claimants could lose their benefits, but
this is possible; let alone losing their health care and a portion of
their pensions," said Kevin Dougherty, president of Sun Life Financial
Canada, speaking at the Canadian Pension and Benefits Institute
conference.
"We saw how benefits and pensions can literally disappear in an instant."
Now people nearing retirement face a new twist.
"Millions
of people asked the questions, what if I have to leave the workforce
five or 10 years early, or what if I have to stay in the workforce five
or 10 years more."
The leading edge of baby boomers will hit age 65 next year, when each day a thousand people in Canada will retire.
"Today
with boomers age 50 to 65, with kids grown and many through school,
the question they're asking isn't 'what if I die,' it's 'what if I
live?' That saps my income and retirement savings. What if I have to
live through another financial crisis?"
Dougherty joins federal
Finance Minister Jim Flaherty and Bank of Canada governor Mark Carney
in worrying about the growing debt Canadians are piling up.
"How
can we be the only place in the developed world where real estate
prices continued to increase for the last two-and-a-half years? What
does that mean? - more and more debt for Canadians."
While
Canadians who can't resist a bargain stock up on moulding empty homes
in the United States, there is fear that the Home Equity Line Of Credit
or HELOC could do in Canada what subprime mortgages did in the U.S.
Of course, retirement won't affect all people the same.
"Women
who are widowed early in retirement actually live three years longer
(than those who aren't), and men widowed early in retirement live three
years less."
While more and more companies with underfunded
pension plans have been reducing benefits and commuted value payouts,
the malaise has spread to employment benefits. Many firms offer minimal
health-care coverage in retirement or have eliminated it, while more
and more current employees find themselves on the hook to find vision
and dental insurance.
Meanwhile, the average number of days lost annually to sickness per worker has risen from eight in 1989 to 13 in 2009.
Dougherty's
conclusion is that neither government nor lawyers will take care of an
aging workforce, "and the next generation of children is not going to
want to take care of us."
He said
there is more onus on people in the pension and benefits and human
resources areas to devise products and provide advice.
"Our
industry needs to be much more than just helping to attract and retain
employees. The financial security of millions of Canadians depends on
the work we do."
One such move is encouraging government to establish a new personal health- savings account.
"We've
been advocating something called the registered health savings plan,
where people can save money on a pre-tax basis to be used for their
health-care costs in retirement. There are other examples like critical
illness insurance. But we've got to step up to this. I think this is
going to be one of the big areas of the future."
Even
with defined contribution pension plans, where investment risk lies
with the individual, the employers can provide advice through plan
sponsors.
"Narrowing the field from 4,000 fund managers to 12 is
providing advice. Overseeing and switching out of managers is providing
advice. Setting a level of contribution and matching is providing
advice. Providing tools that ask questions and lead people to
recommendations is providing advice."
But there is need to help
educate people about financial literacy, abetting the federal
government's task force on the issue that has been touring Canadians for
submissions and will issue a report in December.
"The most
striking finding is the degree of the challenge that we have, the
surprising lack of financial literacy in the general population is
really, really striking," Dougherty said.
"There's a challenge in
literacy - reading and writing in English, because we have such large
immigration; a challenge in numeracy, lots of people don't like working
with numbers; and you layer on top of that the knowledge and skills of
financial consequences."
All this is set against a backdrop in
which the financial crisis produced severe stock market downturns that
scared individuals from investing personally, while corporations were
similarly spooked and didn't invest in technology to improve
productivity and grow their workforces.
"There
was a two-year period in which we didn't invest, and that's going to
hurt us for two to five years," said Glen Hodgson, chief economist of
the Conference Board of Canada. "Health care will soon emerge as a top
concern for Canadians. Aging is going to suck the life out of our
economy slowly."
But just as baby boomers were told 40 years ago
that the investment of the future would be "plastics," Hodgson has his
own tip: "India will be the next China, it will keep growing at eight
per cent for a number of years."You can bet your hip replacement on it.
Finally, my favorite deflationist, Gary Shilling was interviewed on Yahoo's Teck Ticker on Monday warning us that the age of deleveraging is upon us:
Recently I wrote that the deficit-cutting projects and media campaigns sponsored by billionaire Pete Peterson all "focus on the same narrow band of options" that "reflect far-right positions," but nevertheless are usually described in the media as "moderate" and "bipartisan."
I received a response from an official at the Peterson Foundation. Out of courtesy, I will not name the person or quote their email in full. The official said that my statement was "patently untrue" and a "mischaracterization." Some of their other statements can be found below, along with my observations about them. My reply to the Foundation then follows:
Foundation: "We strongly believe that Social Security must be preserved and protected. One of the goals of the Foundation is to ensure that this vital program is strong, solvent and secure for future generations, particularly America's most vulnerable populations ... "
Peterson-funded projects have consistently given the impression that Social Security is contributing to the deficit (which it is prohibited by law from doing); that its long-term shortfall must be met primarily by benefit cuts, and only secondarily by revenues; and that it is acceptable to increase tax payments for the wealthy so gradually that it will take forty years for the payroll tax to cover the same percentage of wealth it covered more than twenty years ago.
To be fair, Peterson-funded proposals have recently included modest benefit increases for the lowest-income recipients.
Foundation: "Mr. Peterson's personal views include the need to increase benefits for the poorest Americans receiving Social Security and reduce benefits for the well-off. He has suggested that progressive benefit reforms such as progressive wage indexing, affluence testing and increasing the payroll tax cap be considered."
"Reducing benefits for the well-off" sounds reasonable - until you realize that this billionaire's definition of the "well off" includes people who earned an average of $43,000 per year during their work life. A 20-year-old who earned that average through their work life would see a 17% cut in benefits from one Peterson-backed proposal, and would see a 30% cut if they earned an average of $69,000. Under the Simpson-Bowles plan, even workers who made as little as $20,000 average would see benefit cuts starting in 2040.
As for the truly wealthy who receive Social Security benefits, the problem is that there aren't enough of them to make a difference. Remember, retirement benefits only go up to a certain amount. It sounds reasonable to say that billionaires shouldn't receive a Social Security check (although they've paid for the benefit, too). But when you calculate the number of wealthy people that would be excluded under any reasonable plan, there aren't that many of them. When you add in all the time and expense of identifying them and tracking them (How would that be done? Cross-reference IRS returns and check their bank and real estate holdings?), studies have concluded you'd spend more to find them that you would save by cutting their benefits.
Foundation: "Mr. Peterson and the Foundation have also repeatedly stated that we must consider all viable solutions from across the political spectrum if we hope to meaningfully address our fiscal challenges. As part of this process, the Foundation believes that it will be imperative that wealthier Americans contribute significantly to help stabilize our nation's finances, secure the social safety net and provide critically needed resources for education, research & development and infrastructure."
Nevertheless, a recent Peterson-backed proposal (Rivlin/Domenici) would cut both Social Security benefits and Medicare spending, which would disproportionately harm seniors who are not wealthy. The same plan would also sharply lower the top marginal tax rate, from 35% to 27%, making up the difference with a highly regressive sales tax of 6.5% and percentage limits for tax deductions that would disproportionately benefit the wealthy.
That is a "right-wing" plan by any measure. It's certainly not a plan in which "wealthier Americans contribute significantly to help stabilize our nation's finances."
My response to the Foundation follows:
____________________Dear X:
Despite your suggestion that my characterization of Mr. Peterson's views is misleading, it seems to me that the consistent themes behind every organization, study, and communications campaign Mr. Peterson has funded have been:
- An overemphasis on balancing the budget in a time of economic crisis, when stimulus is urgently needed;
- A failure to note the critical role the banking sector has played in creating today's deficits;
- The mistaken notion that the country cannot continue to provide the current level of Social Security benefits;
- A refusal to propose lifting the payroll tax cap to 100%, as polls show the public (including most Republicans) would prefer;
- A refusal to consider returning to the marginal tax rates which were applied to high incomes in recent decades;
- Proposals which would delay the process of returning the payroll to its 1980's-era level, when it covered 90% of all income as intended by the Greenspan Commission. (No liberal, that Alan Greenspan!) Some proposals funded by Mr. Peterson would delay this re-stabilization by as much as a half a century;
- Social Security proposals that give greater weight to benefit cuts than to tax increases;
- Communication campaigns designed to fuel the misconception that Social Security contributes to the general deficit; and,
- A desire to convince the public that levels of debt considered manageable in other nations pose a grave threat here.
I agree that long-term deficits are a grave and even critical problem. But these long-term debts are fueled almost exclusively by the truly staggering increases in health care costs that have been projected. Yet the projects funded by Mr. Peterson are notable for their lack of emphasis on health management programs that could contain these costs, as has been accomplished in other developed nations.
I respect Mr. Peterson's accomplishments, which have given him the ability to promote his opinions in many different ways. But these opinions, however legitimate, are normally considered right-wing. The attempt to characterize these conservative views as "bipartisan" has been very successful from a marketing point of view, but has no basis in fact as far as I can see.
Thank you for writing, and best regards -
Richard Eskow
PS: I saw that Mr. Peterson signed the Millionaire's Pledge. That's admirable, and I thank him for it.
_____________________Note: I have not yet received a reply.
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