As a number of provincial politicians have bowed out of running for re-election ahead of Oct. 24, a national tax reform advocacy group is highlighting the cost of political retirement– to the tune of $20 million – with taxpayers footing the bill.
“While we thank these retiring politicians for their work, taxpayers need to know the huge cost of these gold-plated pensions,” said Kris Sims, B.C. director of the Canadian Taxpayers Federation.
“These pensions simply aren’t affordable for taxpayers. MLAs need to reform their pension plan.”
According to the government, MLA pensions are calculated by taking the highest earning years of the retiring MLAs and factoring in their years of work. The annual pension payments are capped at 70 per cent of the highest earning years.
That means that for every $1 the politicians contribute to their own pension plans, taxpayers pay $4, Sims said.
“It’s time to end these rich pension schemes,” said Sims, adding that MLAs not seeking re-election are allowed to collect the equivalent of their salaries for up to 15 months while they look for new jobs, and they get up to $9,000 if they need skills training.
The federation calculated the expected pensions for 16 retiring MLAs, and determined that former house speaker and BC Liberal MLA Linda Reid is expected to collect the highest per-year amount, roughly $107,000 annually when she turns 65 years old.
Reid, who represented the Richmond South Centre since 1991, is the longest-serving woman in B.C.’s government history.
Other estimated pension totals for MLAs include:
- Tracy Redies, B.C. Liberal MLA – ineligible due to less than six years in office.
- Claire Trevena, NDP cabinet minister – estimated $80,000 per year, $1.9 million lifetime.
- Shane Simpson, NDP cabinet minister – estimated $80,000 per year, $1.9 million lifetime.
- Scott Fraser, NDP cabinet minister – estimated $80,000 per year, $1.9 million lifetime.
- Carole James, NDP cabinet minister – estimated $82,000 per year, $2 million lifetime.
- Michelle Mungall, NDP cabinet minister – estimated $58,000 per year, $1.4 million lifetime.
- Judy Darcy, NDP cabinet minister – estimated $37,000 per year, $647,000 lifetime.
- Doug Donaldson, NDP cabinet minister – estimated $58,000 per year, $1.4 million lifetime.
- Rich Coleman, former B.C. Liberal cabinet minister – estimated $109,000 per year, $2.6 million lifetime.
- John Yap, former B.C. Liberal cabinet minister – estimated $65,000 per year, $1.5 million lifetime
- Darryl Plecas, Independent Speaker – estimated $38,000 per year, $714,000 lifetime.
- Andrew Weaver, former Green Party Leader – estimated $31,000 per year, $764,000 lifetime.
- Donna Barnett, B.C. Liberal MLA – estimated $46,000 per year, $400,000 lifetime.
- Linda Larson – B.C. Liberal MLA – estimated $29,000 per year, $469,000 lifetime.
- Ralph Sultan, former B.C. Liberal MLA – estimated $74,000 per year.
- Linda Reid, former B.C. Liberal Speaker – estimated $107,000 per year, $2.6 million lifetime.
Source: – Victoria News
John Roberts put the country before politics – CNN
The return of austerity politics – Washington Post
Note that I label this the return of austerity politics, not economics. Although garments will be rended and dire warnings will be made, this isn’t about the economics of debt. At one level, it’s about blocking Democratic priorities. At a deeper level, it’s about kneecapping a Biden presidency before it has a chance to take off. (Disclosure: I informally advise the Biden campaign.)
This outcome must be avoided and not just because the evolving economics of fiscal debt — one of the most interesting, evolving and inherently progressive areas of economics — says so. The main reason the return of austerity politics must be resisted is its human cost.
The equation couldn’t be simpler: Austerity equals human suffering. And such suffering will not be equally distributed. It will fall on those most vulnerable to the coronavirus and the economic damage it has unleashed.
The new economics of public debt underscores the urgency of this equation. The old argument that public borrowing competes with private borrowing, leading to higher interest rates and slower growth, has lacked empirical support for decades. Right now, we have a historically huge budget deficit of 15 percent of GDP (over $3 trillion) and debt about the same size as the economy. Yet the yield on the 10-year Treasury bill is below 1 percent (its average since the 1960s is 6 percent). More to the point, because these are unusual economic times, interest rates on government debt have been uncorrelated to the magnitude of that debt for decades now, as I discussed in recent testimony on the topic.
In fact, this has been the case in most advanced economies, regardless of debt levels, with Japan as the most notable example (its public debt has long been multiples of its economy). One reason is that these economies have operated below capacity, with both low inflation and excess savings relative to investment putting downward pressure on rates. That dynamic has drawn central banks, like our Federal Reserve, into the mix, trying to close output gaps by aggressively holding down the benchmark rates they control.
Inequality also plays a role. When growth flows disproportionately to those who are already wealthy, they tend to save, not spend, marginal dollars relative to middle and lower-income households. This, too, has boosted savings and lowered interest rates, while restricting the spending and the living standards of lower-income families.
But whatever the reason, the fact of persistently low rates offers new opportunities for near-term relief to those who need it and longer-term public investment to meet the existential challenges we face right now, from climate change to racial injustice.
One strong piece of evidence for this contention of ample fiscal space is that the most recent Congressional Budget Office forecast of what it will cost the government to service its debt has gone down, not up, since its previous forecast. And that earlier forecast didn’t include that $3 trillion of new debt incurred to offset the pandemic. How can we have more debt yet pay less to service it? Lower rates, of course.
This doesn’t mean that deficits never matter. They do, not least because when we carry such high debt levels, we’re a lot more vulnerable to an unforeseen spike in interest rates. So piling on wasteful debt is as economically wrongheaded now as it has ever been, which is why the highly regressive, deficit-financed Trump tax cuts were such a mistake. This also implies that the suddenly hawkish Republicans will be guilty of two fiscal crimes: piling on bad debt while refusing to countenance good debt.
But isn’t bad and good debt in the eye of beholder? No, because good debt does three things that bad debt doesn’t: It promotes growth, relieves hardship and advances racial equity. Investing in affordable housing for racial victims of housing segregation: good debt. Cuts in capital gains taxes: bad debt. Enhanced benefits for the unemployed and nutritional support for the millions not able to meet this basic need: good. Tax breaks for profitable corporations: bad.
Still, even with low rates and the ensuing low debt service, it is essential to raise the necessary revenue to pay for permanent measures, such as lasting investments in clean energy, standing up an affordable child-care sector and providing universal pre-K and free college for those of limited means — all of which are Biden proposals. Especially as these programs are both growth- and equity-inducing, paying for them through deficit financing is better than not doing them at all, but to stop there would severely undercut their political sustainability.
Should the election outcome break our way, how can progressives achieve these goals in the face of the forthcoming fiscal flip?
First, we must ignore the phony caterwauling of the deficit chicken hawks. One rule to be aggressively enforced is that anyone who voted for the Trump tax cuts has zero credibility on deficits and should be summarily ignored, if not ridiculed.
Second, we must help politicians with austere muscle memory understand these new dynamics. Here again, that’s not just an economic argument; it’s a political one. If conservatives ignore austerity when they’re in power but Democrats embrace it when they take control, then conservatives will consistently meet the demands of their constituents in the donor class while Democrats consistently fail to meet the needs of their constituents.
That is a not just a recipe for facilitating reckless fiscal policy and wasteful debt. It’s also a recipe for losing progressive support and political power — something no Democrat should want.
The Real Divide in America Is Between Political Junkies and Everyone Else – The New York Times
The common view of American politics today is of a clamorous divide between Democrats and Republicans, an unyielding, inevitable clash of harsh partisan polarization.
But that focus obscures another, enormous gulf — the gap between those who follow politics closely and those who don’t. Call it the “attention divide.”
What we found is that most Americans — upward of 80 percent to 85 percent — follow politics casually or not at all. Just 15 percent to 20 percent follow it closely (the people we call “deeply involved”): the group of people who monitor everything from covfefe to the politics of “Cuties.”
At the start of the year (i.e., pre-pandemic), we asked people to name the two most important issues facing the country. As expected, we found some clear partisan divides: For example, Republicans are more likely than Democrats to cite illegal immigration as an important issue.
But on a number of other issues, we found that Americans fall much less neatly into partisan camps. For example, Democrats and Republicans who don’t follow politics closely believe that low hourly wages are one of the most important problems facing the country. But for hard partisans, the issue barely registers.
Partisan Republicans were most likely to say drug abuse was the most important problem facing the country. But less-attentive Republicans ranked it second to last, and they were also concerned about the deficit and divisions between Democrats and Republicans.
Among Democrats, the political junkies think the influence of wealthy donors and interest groups is an urgent problems. But less-attentive Democrats are 25 percentage points more likely to name moral decline as an important problem facing the country — a problem partisan Democrats never even mention.
These gaps extend beyond issues to feelings about the other party. Hard partisans are twice as likely as people who pay less attention to politics to say that they would be unhappy if their child married someone of the opposing party.
Hard partisans are also more likely to speak out about these political likes and dislikes. Almost 45 percent of people who are deeply involved say they frequently share their views on social media — in some cases, daily. It’s only 11 percent for those without a politics habit. To put this in perspective, a Pew study finds that 10 percent of Twitter users are responsible for 97 percent of all tweets about politics.
This gap between the politically indifferent and hard, loud partisans exacerbates the perception of a hopeless division in American politics because it is the partisans who define what it means to engage in politics. When a Democrat imagines a Republican, she is not imagining a co-worker who mostly posts cat pictures and happens to vote differently; she is more likely imagining a co-worker she had to mute on Facebook because the Trump posts became too hard to bear.
We see this effect in a study we did with three other political scientists, James Druckman, Samara Klar and Matthew Levendusky. We asked a group of over 3,000 Americans to describe either themselves or members of the other party. Only 27 percent of these people said that they discuss politics frequently; a majority consider themselves moderates. But nearly 70 percent of these people believe that a typical member of the other party talks about politics incessantly and is definitely not moderate.
For partisans, politics is a morality play, a struggle of good versus evil. But most Americans just see two angry groups of people bickering over issues that may not always seem pressing or important.
How can politics better match the opinions of a majority of Americans? The fact is, it’s not an easy problem to solve. We can try to give the hardened partisans less voice in the news. Featuring people who exemplify partisan conflict and extremist ideas elevates their presence in politics (though of course by definition, it is the partisans who are most closely watching the news who are also most likely to give their opinions). This is particularly true of social media: What a vocal minority shares on social media is not the opinion of the public. Yet such political tweets, as the political communication scholar Shannon McGregor finds, are increasingly making their way into news coverage as stand-ins for public opinion.
There might be an advantage for politicians who focus less on the demands of partisans and more on tangible issues. Yes, hard partisans are more likely to reward ideological victories, but they are also a minority of the electorate.
Each day, partisan Democrats wonder whether that day’s “outrage” will finally change how people feel about President Trump. Partisan Republicans wonder the same thing about Joe Biden. But most “regular” voters are not paying that much attention to the daily onslaught. It turns them off.
And the major scandals that do break through? Well, to many of them, that is “just politics.”
Yanna Krupnikov (@ykrupnikov) and John Barry Ryan (@ryanbq), associate professors of political science at Stony Brook University, are the authors of a forthcoming book about polarization and disengagement in American politics.
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