RSSShould governments guarantee auto pensions?
Apr 23
I just listened to a caller on the radio getting mad at any suggestion that the Canadian government should not fully guarentee private auto pensions. I’m curious, what possible argument could be made that a government should guarentee private pensions, whether auto or not? I’d be curious to see any historical examples if anyone has any.
I’m assuming auto workers in Canada paid into the Canadian Pension Plan like everyone else, so would have that in case of any failure of their private pension.
But, like with every part of the money asked for by the auto sector, my question is: why should you get that when no one else does? No one else’s private pensions are guarenteed by the government. If my retirement savings drop 75% due to a massive recession, will the government pay back the amount I lost? No other companies private pensions are backstopped by the government.
The caller also mentioned “we’ve given billions to the financial sector, so why not for us?” Right, that’s sound fiscal policy. Why end it there? Why not pay everyone in the country double their working salary once they retire, plus full health benefits?
I’d have a less extreme reaction to this if the caller were proposing the government begin backstopping all private pensions, but he’s clearly not. Even though that could cost a fortune, at least it would be fair.
But, I’ll assume the best and guess the caller wouldn’t mind his taxes being raised 10% so he can pay his portion of the losses in my RRSP this year.
Apr 28, 2009 @ 05:00:54
His taxes have to go up 10% just to cover only *his portion* (1/30 millionth) of the amount you lost in your RRSP this year? Holy crap your RRSP must have been huge.
I didn’t really like the financial bailout, and was even less of a fan of the auto bailout, but it really has to stop with the Thier bailout. 
Apr 28, 2009 @ 06:20:39
Hah, no I didn’t state that very precisely. I was assuming we could do a match-up thing, where he uses his 10% tax to pay down my losses, and if that’s not enough we go find other people.
I do like the idea of a Thier bailout though.
Apr 30, 2009 @ 14:44:24
As it turns out, a Thier bailout would have been smarter money than the Chrysler bailout. Between your government and my government, I think we sunk $15-20 billion or so in this last round of bailouts into Chrysler alone. (Remember, Cerberus bought Chrysler just a couple of years ago at the bargain price of only $8 billion.) And, of course, today Chrysler went into Chapter 11.
I’m confident that we would have got a better return for our money on a Thier bailout.
Apr 30, 2009 @ 14:59:26
Agreed, I would have invested my bailout money into a guarenteed return investment, so it wouldn’t have disappeared at least. It would have also been considerably cheaper
I think the governments set themselves as the highest priority receivers for bankruptcy, right? So I assume they’ll get most of their money back. Or is that what they’re converting into stock?