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article imageOp-Ed: Should people be forced to save for retirement?

By Andrew Moran     Oct 4, 2013 in Politics
Ottawa - In Canada, the United States and elsewhere across the globe, the citizenry lives in a society of mandates, force and coercion.
Simply put: if you don’t follow the government’s commands then you are subjected to a fine and/or imprisonment. For instance, if you don’t pay your taxes, the government will use force to make you pay.
When discussing politics, those in favor of such a system like to omit that the government maintains a monopoly of force. The argument usually goes like this: taxes are what we pay for a civilized society and if we don’t pay taxes or obey the government then we’ll become a nation of savages.
Of course, this argument is vacuous because it implies that people are incapable of looking after themselves and must rely on bureaucrats in Washington or Ottawa to solve every quagmire that persists in their daily lives. Indeed, the case could be made that individuals have become so dependent on their government that they have lost their will to survive. Does this justify government intervention? Nope.
The best solution to each country’s ails is the term Ron Paul used to describe libertarianism in a recent interview with Charlie Rose: non-intervention. Unfortunately, not everyone believes that we should live in a non-interventionist state, including CBC News business writer Don Pittis, who published a piece Thursday titled “Canadian pensions: should we be forced to save?
The entire premise of his article is to show that the government must use force to make people save for their retirement because they are just too stupid to perform the task themselves. Again, this point is something coming out of a statist’s dossier. Although Pittis’s opinion piece is deeply flawed and even meretricious, it is not surprising because there are too many people who promote such a concept.
Let’s dissect several points from the piece:
The passionate objections to universal medical care south of the border are a bit of a mystery to most Canadians, but they seem to come mostly from those who are very well off, thank you. In fact, the profile of the Tea Party crowd that is so opposed to Obamacare show they are older and richer and already have their medical expenses covered.
According to a Gallup poll, the Tea Party is comprised of an array of people: Republicans and Independents, men and women, rich and poor, young and old, college educated and non-college educated. In addition, a recent CNN survey found that less than one in five Americans believe their families will be better off under Obamacare.
In the pension debate, there is some of that, too. Certainly the conservative politicians who oppose an expanded Canada Pension Plan system are safe under an umbrella backed by your taxes. Just as in the States, there may also be some push-back from the powerful interests in the private sector, who currently profit from the retirement savings industry.
Using a politician as an example is misguided because no matter what side of the fence a statesman might be, they are still inept and likely bought and paid for by corporations or the unions. I personally don’t care what Jim Flaherty, Stephen Harper or John Baird have to say about this matter. I prefer to submit the historical record of government: it is incompetent.
Furthermore, what would make someone think that the Canadian Pension Plan system would be financially sound by expanding it? Does anyone remember Prime Minister Jean Chretien taking money from CPP to pay down the budget deficit akin to President Bill Clinton did in the 1990s? Of course, it could be sound if people are forced to pay more than half of their incomes in addition to their income taxes, property taxes and sales taxes, but then who would actually be working?
The real ideological question seems to come down to the one I started with. If it is your money, why should governments be allowed to tell you what to do with it?
The government should not tell you what do with your money. Right now, the government already steals from the fruits of your labor in order to pay off the interest on the national debt, to pay the expenses of Pamela Wallin and Mike Duffy and to pay for a bloated welfare system. Why should it tell me what to do with the money I earned?
Even if I make the mistake of not saving for retirement then that is my error and I should be held accountable for the wrongs that I have committed in my life. It’s called personal responsibility, a trait that many seem to lack nowadays, especially those who urge the government to step in and become the supposed crusaders of justice.
It may be that investing is just too complicated, and that if we had a safe and reliable voluntary pension system we would all willingly contribute. That is the justification for the voluntary pension plan idea backed so far by the federal government.
Why does the government have to be involved in the pension business anyway? Shouldn’t the federal government manage the primary facets of what the government ought to be doing, such as immigration, foreign policy and protecting our rights and freedoms?
Also, if people are unaware of how to invest then the private sector is an adequate venue to teach yourself. Many financial institutions offer one-on-one sessions for its customers to understand what investing is, how to do it and when to begin.
Although a voluntary pension system is a step in the right direction, it still is a structure that will experience tremendous abuse, mismanagement and most likely suffer the way the CPP and Social Security in the U.S. have.
Please note: Pittis opines for a while on the voluntary pension system, which I oppose, so I will go on further regarding his points.
And this shows the practical answer to the ideological question: If you don't compel people to save for the future, they simply don't bother.
Once again, this is presumptuous thinking on the part of the author.
Also, we must look at why Canada maintains a very low savings rate of between three and five percent: inflation, price inflation, record-low interest rates, taxes, cost of living increases and insufficient incomes – heck, even government schools are the problem because they don’t teach personal finance and the economics that are instructed are of the Keynesian ideology.
All of these are the direct result of central economic planning and government intervention yet again. So the solution to saving money is to have more government involvement? Nope.
People who work in Canada already have a compulsory pension plan, the CPP (or the Quebec Pension Plan in that province). The money is safe and the fund well run, but the annual $12,000 it pays (as a maximum) hardly covers rent in Canada's most expensive cities.
Canadians are constantly reminded that the CPP is a well-funded, well-oiled machine. But is it? Well, for one thing, today’s contributions are paying for today’s benefits.
Essentially, one could definitely show that the world’s public pension plans, at least in the Great White North and south of the border are ponzi schemes. I wrote over at Capital Liberty News last month: “Think about it: a ponzi scheme is based on creating returns for older investors by garnering new investors – ponzi schemes at least promise high returns while the government at least admits it cannot. The Social Security sends monthly checks to retirees based on funds from younger workers.”
Another aspect is that it’s a terrible investment. According to the Globe and Mail: “contributions of almost 10 per cent over a working life of 25, 30 or 40 years, benefits of 25 per cent over a retirement of 10, 15, 20 years.”
The CPP has been insolvent before and its future doesn’t look bright. At the present time, the CPP faces an unfunded liability of approximately $800 billion – since these are government estimates it’s best to conclude that it’s likely in the area of $1 trillion.
Rather than asking whether the government should force you to save for your own retirement, it might be better to turn the question around.
Responsible people might want to ask, would you like the government to force everyone else to save for their retirement? Or would you like to pay for it?
I will put it as simple as I can: no government-run retirement plan. Leave me alone. If there are people in need, I will voluntarily contribute funds as I do now at the age of 25.
This article was initially published on Capital Liberty News.
This opinion article was written by an independent writer. The opinions and views expressed herein are those of the author and are not necessarily intended to reflect those of
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