Debt, Unfunded Liabilities And Generation Screwed

[Anonymous]

For those of us born after 1980, it is our duty to try and force our governments to spend less, tax less, promise less and save more. If they do not, by the time my son is my age he will be paying the majority of his income to finance rich benefits for his grandma, but he himself will never receive.

In the recent fall economic update, Canadians learned that after nearly a decade of deficit spending, the federal government will finally return to a surplus in 2015.



We will finally stop borrowing in order to cover the day-to-day costs of government. Just prior to this update, federal Finance Minister Joe Oliver also announced that young families will be receiving several new tax cuts and credits to help with the cost of raising children.



While it is nice to see the feds bring in policies supportive of the next generation of Canadians, these new measures pale in comparison to the fiscal burden these youngsters will face in their lifetime.



Just look at the obvious worry: Canada's debt burden. Our federal debt has surpassed $600 billion, and the combined debt load of the provinces is another $600 billion, leaving Canadians with outstanding government debt of $1.2 trillion.



That means every man, woman and child in Canada is on the hook for more than $34,000.



Toddlers and newborns owe just as much as seniors who have enjoyed a lifetime of government services. Is that fair? Only if those toddlers and newborns could assume that they will receive the same level of government services as their grandparents.



The problem is, they will not.



That's because alongside that $34,000 in combined government debt, Canadians are also on the hook for future debt (also often known as "unfunded liabilities"), which will be caused by funding shortfalls in government entitlement programs. Politicians with hearts bigger than wallets have drastically expanded government programs and benefits over the past few decades, with programs like health care, elderly benefits and government-employee pensions.



Instead of pre-funding these programs, or saving up to pay the expanding costs of these programs when the largest cohort of Canadians — baby boomers — retire, our governments have done the opposite.



They have buried Canadians under a mountain of debt, which will make it all the harder to also cover the future unfunded liabilities of government programs.



Young Canadians will be stuck with the tab, both for past debt and future unaffordable promises. New and future taxpayers will be stuck paying for the lucrative benefits of older workers — benefits that likely will not exist by the time they retire.



Take the Old Age Security program (OAS), for instance. Unlike the Canada Pension Plan (CPP), no one contributes directly into some OAS investment fund. The money sent out to more than five million seniors each month comes directly from general revenues.



This program cost taxpayers $43.7 billion in 2013, or about 17.5% of all federal spending.



As more baby boomers retire — nine million will leave the workforce over the next two decades — the cost of OAS will skyrocket. By 2050, around the time the first of the Millennials (those born after 1980) will reach retirement age, this program is projected to reach $200 billion, representing nearly a 30% increase relative to total spending.



It is difficult to imagine how this program will survive. It will require drastic tax increases or significant reductions in benefits.



Despite paying into this program their whole lives, young Canadians — a.k.a. Generation Screwed — will only ever receive a fraction of what they contribute. The same is true for most government programs, be it health care, the CPP or other current entitlements.



If Generation Screwed wants to help themselves, they need to start demanding changes. They should start by insisting federal and provincial governments start aggressively paying down debt. They also need to push politicians into funding the seemingly never-ending future unfunded liabilities.

http://www.edmontonsun.com/2014/11/25/generation-screwed-must-demand-debt-reduction">http://www.edmontonsun.com/2014/11/25/g ... -reduction">http://www.edmontonsun.com/2014/11/25/generation-screwed-must-demand-debt-reduction

[Obvious Li]

all true.....fortunately for us old fuckers you youngsters invariably vote for the party that promises to spend the most money.....and just let me send out a great big thank you in advance to all you millennials and gen x,y and z'ers.......keep working hard and sending in those contributions.........go Justin

[Asian Pride]

As long as Harper keeps the Temporary Foreign Worker scam in check, which he recently has, I will vote for him.



If not?  NDP on the ballot square will get my mark.

[Anonymous]

For those of us born after 1980, it is our duty to try and force our governments to spend less, tax less, promise less and save more. If they do not, by the time my son is my age he will be paying the majority of his income to finance rich benefits for his grandma, but he himself will never receive.

In the recent fall economic update, Canadians learned that after nearly a decade of deficit spending, the federal government will finally return to a surplus in 2015.



We will finally stop borrowing in order to cover the day-to-day costs of government. Just prior to this update, federal Finance Minister Joe Oliver also announced that young families will be receiving several new tax cuts and credits to help with the cost of raising children.



While it is nice to see the feds bring in policies supportive of the next generation of Canadians, these new measures pale in comparison to the fiscal burden these youngsters will face in their lifetime.



Just look at the obvious worry: Canada's debt burden. Our federal debt has surpassed $600 billion, and the combined debt load of the provinces is another $600 billion, leaving Canadians with outstanding government debt of $1.2 trillion.



That means every man, woman and child in Canada is on the hook for more than $34,000.



Toddlers and newborns owe just as much as seniors who have enjoyed a lifetime of government services. Is that fair? Only if those toddlers and newborns could assume that they will receive the same level of government services as their grandparents.



The problem is, they will not.



That's because alongside that $34,000 in combined government debt, Canadians are also on the hook for future debt (also often known as "unfunded liabilities"), which will be caused by funding shortfalls in government entitlement programs. Politicians with hearts bigger than wallets have drastically expanded government programs and benefits over the past few decades, with programs like health care, elderly benefits and government-employee pensions.



Instead of pre-funding these programs, or saving up to pay the expanding costs of these programs when the largest cohort of Canadians — baby boomers — retire, our governments have done the opposite.



They have buried Canadians under a mountain of debt, which will make it all the harder to also cover the future unfunded liabilities of government programs.



Young Canadians will be stuck with the tab, both for past debt and future unaffordable promises. New and future taxpayers will be stuck paying for the lucrative benefits of older workers — benefits that likely will not exist by the time they retire.



Take the Old Age Security program (OAS), for instance. Unlike the Canada Pension Plan (CPP), no one contributes directly into some OAS investment fund. The money sent out to more than five million seniors each month comes directly from general revenues.



This program cost taxpayers $43.7 billion in 2013, or about 17.5% of all federal spending.



As more baby boomers retire — nine million will leave the workforce over the next two decades — the cost of OAS will skyrocket. By 2050, around the time the first of the Millennials (those born after 1980) will reach retirement age, this program is projected to reach $200 billion, representing nearly a 30% increase relative to total spending.



It is difficult to imagine how this program will survive. It will require drastic tax increases or significant reductions in benefits.



Despite paying into this program their whole lives, young Canadians — a.k.a. Generation Screwed — will only ever receive a fraction of what they contribute. The same is true for most government programs, be it health care, the CPP or other current entitlements.



If Generation Screwed wants to help themselves, they need to start demanding changes. They should start by insisting federal and provincial governments start aggressively paying down debt. They also need to push politicians into funding the seemingly never-ending future unfunded liabilities.

http://www.edmontonsun.com/2014/11/25/generation-screwed-must-demand-debt-reduction">http://www.edmontonsun.com/2014/11/25/g ... -reduction">http://www.edmontonsun.com/2014/11/25/generation-screwed-must-demand-debt-reduction

I don't pay attention to politics, but thank you for this information..



Maybe some people should spend less on Christmas this year.

[Anonymous]

^Not just at X-mas, they should slash spending and save more year round. Some spending we can control, like cars, vacations, clothes and the latest I-phones. However, the growing tax burden is something we cannot. Voting in a different party will not change this sad situation either. None of them have the balls to make the necessary reforms.

[Anonymous]

And speaking of being screwed, the McGuinty and Wynn regime have doubled the size of Ontario's debt and made this former economic engine of Canada a have not province since they began their reign of economic terror.

[Anonymous]

And speaking of being screwed, the McGuinty and Wynn regime have doubled the size of Ontario's debt and made this former economic engine of Canada a have not province since they began their reign of economic terror.

A guest on CBC yesterday said lower oil and gas prices might help Central Canada, but overall if they stay low long term, it will be bad for Canada..



For now, I like paying less than one dollar per litre for gasoline.

 ac_smile