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Written by Simon on 14-02-2008 18:16 - Registered
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Don't believe everything a Globe and Mail economist tells you. These are ther same guys who said clear skies in the sub-prime market, remember?
I perceive you to have what the actuaries are calling feelings of "inter-generational inequality". But temper it with a little bit of old power analysis. If you and Fortin are right, what's the obvious policy implication? Cut health care, make everyone pay for their own, see plenty of people expire, and all just in time for you not to use them too. That's where this is going, and not necessarily on reliable future projections. Anyway, while you quote most of the right people in the field, some basic bits to think upon: you did not add in tax revenue from RRPS redemptions to the projected government revenues (partially off-setting tax losses from smaller workforce), a turnover in inheritance to the next generation, future productivity gains (expanding avilable amounts to distribute), pressure to cut services or cap costs (see what happened in 1995). Finally, break down those costs to seek out where the cost inflation is coming from. It is not just growth in users of services, but price inflation as well, and that is potentially something that can be controlled politically. If we\'re talking medical costs, is it drug costs (the main driver in the US, but it might be different here, where we have a royalties review board that can impose prices, I just don\'t know if they do). Maybe the fundamental point is that, often, the economcially rational response to providing a large scale service (health care, income, etc.) is to pool the cost of provision of that income over as large a group as possible. Sometimes we also propose risk-pricing the same (as with any insurance scheme), which effectively means the users pay more (sick pay more than healthy, poor pay more than rich), which can be anti-social if not anti-democratic. That is I think the fundamental choice that will arise out of the movement of the Boomers through their dotage. And the lesson for us (and here, I\'m going to pretend I\'m still 32) is that we have to live with whatever system gets put into place to deal with them. Sad, but there it is. |
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