Archive for August, 2013

“Why Do We Give So Much Foreign Aid?”

Posted on August 19, 2013. Filed under: Uncategorized |

The short answer to that question is “We don’t.”

It seems like every single day I pour myself a cup of joe, sit down in front of my laptop, log onto Facebook and prepare myself to see something in my news feed about the travesty of government waste that is foreign aid.

This is not my Conservative, ultra-right, Teabagging loony friends either (though admittedly, this brand of ignorance knows no ideological bounds). No- it is my Liberal, progressive and Libertarian friends too.

I posted a week ago dismantling an ignorant rant on the Canada Pension Plan (CPP) that mentioned foreign aid as a bit of wasteful government spending.  This was not posted by a right-wing ideologue.  This was posted by a close high school friend who is only slightly more conservative than I am.  This week I found this gem in my news feed, posted by one of my favorite bloggers and regular commenters on this blog, who could arguably be more left-leaning than I am on many issues:

foreign aid

Post reads: In Canada-we have to press “1” to speak English, In Canada-the homeless go without eating, In Canada-the elderly go without needed medicines, In Canada- the mentally ill go without treatment, In Canada-our troops go without proper equipment, In Canada-our Vets go without promised benefits, yet we donate billions to other countries before helping our own! Have the guts to re-post blahblah blah 1%,99% blah blah.

There are several (almost) good points raised by this little message.  We need to do more for the homeless.  We could do much more for the mentally ill.  We need a better social safety net- as good as our social safety net is (and I am more than proud of how much my government does) there is much room for improvement.  There are a few things about this post that really bother me though, so I want to clarify some things before I get to the main topic, which- as the title suggests- is foreign aid.

  • I think the author of this post (and anybody who posts it) should be ashamed of the sentiment that “pressing ‘1’ to speak English” is something worthy of complaining about.  We live in a bilingual country- and even if we did not- it should be common decency (and prudent business) that companies and governments would offer services to large linguistic minorities. Anyone who agrees with this sentiment has never lived somewhere where they were a linguistic minority and is just displaying their privileged ignorance.
  • I am relatively certain that the homeless in Canada do eat from time to time, so pedantically the statement “our homeless go without eating” is kind of an exaggeration. (and they are quite thankful that they are Canadian and therefor worthy of enough compassion for you to feel the need to feed them sometimes!)
  • I am sure that some elderly people lack proper medical care.  The fact that we have universal healthcare and a comprehensive drug benefit for seniors means that that problem is greatly mitigated.
  • Some mentally ill people go without treatment.  Again, to be pedantic- the claim that they, as a group,  “go without treatment” is an exaggeration.  Many do get treatment- and anyone who has worked or volunteered where they come in contact with the mentally ill will tell you that we can only dream of a world where diagnosis and treatment is near 100%, though admittedly we could do better.
  • We do not “help others before helping our own”.  That is a pernicious lie.  We help others decidedly after helping our own.  We have very comprehensive social programs that help all the groups listed in this post.  We spend >97% of our annual budget on “helping our own”.  That statement is the biggest crock of shit I have ever heard, and I have heard of Jenny McCarthy.

Foreign Aid:  How Much is “Too Much”?

How many billions of dollars do you think Canada spent on foreign aid in 2011-2012?

Guess. Go ahead….

If you said “4.9 billion dollars” then you obviously have access to Google.

That is a lot of money!  That’s, like, billions of dollars! That has to be too much, right?

Well, let’s think of it this way:

Foreign aid accounts for just 1.8% of the total budget.

Foreign aid accounts for 0.28% of GDP

Canada spends almost five times as much on both the military ($22.8B) and on health care transfers ($27.2B)

Almost twice as much went to Aboriginal Canadians ($7.7B) and to infrastructure and research grants ($7.5B)Sudan-Sud

Three times as much goes to unemployed Canadians through Employment Insurance ($17.6B)

You remember those poor elderly people nobody was helping?  They get eight times as much! ($38B)

So foreign aid is not a very big part of our budget.  In fact, Canada spends more than 95% of it’s income on Canadians.

Here is an analogy for you:  Dave makes $30,000 per year.  1.8% of his gross income is equal to $540.  If he bought a Medium Tim Horton’s coffee every day, he would spend more of his income on coffee than Canada does on foreign aid.  If he bought poutine three times a week, he would spend a larger percentage of his income than Canada spends on the rest of the world.  If he bought Pizza Pizza twice a month, he spent more than Canada does feeding the friggin’ whole earth as a percentage of his total income.

If you broke down how much aid money each and every Canadian gives, it amounts to $142.11

If you broke down how much each Canadian taxpayer gives, it amounts to $194.24

If you broke down how much each person in a country receiving aid gets, it amounts to $ 0.84

If you want to get specific:

Afghanistan received $316,723,017 in 2009/10- which is $10.41 per person.Untitled presentation

Ethiopia received $210,524,036 or $2.48 per person

Tanzania?  $144,688,573 or $3.13

Ghana?  $139,393,816 or $5.58

Pakistan?  $129,737,061 or $0.73

Mali?  $129,319,342 or $8.16

Sudan?  $127,475,967 or $3.71Untitled presentation (1)

Mozambique?  $125,247,658 or $5.23

Bangladesh? $120,642,458 or $0.80

Russia?  $118,659,885 or $0.83Untitled presentation (2)

So if you think that Canada cares more about foreigners than it does about Canadians- I really hope you think about these statistics.

What Has Foreign Aid Ever Done For Anybody?

You remember Polio?
It is all but eradicated thanks in part to foreign aid.  This has widely been considered a success by everyone, save iron lung manufacturers. And people who make crutches.

You remember Smallpox?

Photo from Wikipedia

Photo from Wikipedia

Totally gone!  No reported cases of a disease that has killed millions and millions of people over human history.  Zero dead people in the last 35 years. Zero.  None.  Guess what helped pay for that?

Hey, you remember when the global economy crashed in the late 1990’s and again in the early 2000’s- causing South Americans and then Asians to fall back into Third World status instead of continuing as emerging economies? Neither do I.

Do you remember when a desperate Russia crumbled under the weight of communism and untold masses of nuclear weapons fell into the hands of terrorists? Thankfully, neither do I.

Millions of lives have been saved with food aid.

Millions of lives have been saved with medical aid.

Afghan girls go to school, Africans don’t starve in greater numbers, we create the backbone of emerging economies with foreign aid.

Could more be done?  Sure!  Will more get done (or done better) if we tell the rest of the world to go it alone?  I don’t think so, and you are welcome to argue that in the comments.

Just because all the worlds problems haven’t been fixed in the fifty some-odd years we have had a focused foreign aid policy is no reason to say “Screw it” and give up.  If that was the case, we might as well have no Canadian welfare system, since poverty still exists.  We might as well stop funding to the mentally ill, since we pour billions into programs and still have people untreated.

Foreign aid is a geopolitical necessity- unless we want to ignore human suffering or be more interventionist (I’m talking military here).  Since I seem to like having a conscience and I’m under the impression that military occupations cost a fair amount of money (see Afghanistan), foreign aid- at least to the degree that we give- seems to be the least we could do.  When I say “the least”- I mean that in almost a literal sense.  We do very little.

So Do We Really Put Foreigners First?

As I already mentioned, the dirty, worthless foreigner who steals the most of our money is Joe Afghan.  He is going to pilfer $10.41 of your hard earned money.

Poor You, you only got $7650.

So you could keep enough of your hard earned tax dollars to buy the new Dan Brown book in softcover- or hundreds of Afghani girls could go to school.

If we just stopped giving foreign aid altogether, you could buy groceries for a family of four for about a week and a half with your $195 savings- and millions of human beings could suffer just a little bit more.  But hey, that’s like getting free groceries, right?

If giving every Canadian $7650 per year and every aid recipient $0.84 per year is “putting Canadians second”, you have some pretty questionable math skills. foraid Maybe that $4.9B needs to get spent on mathematics tutors.

In my opinion, the idea that we “spend too much foreign aid” comes from exactly the same place as the argument that English Canadians are hard done by because they need to press “1” to get an English operator.  It isn’t enough to have it better than someone else and give the least of concessions- those people need to feel grateful that we let them breath the same air.

Advertisements
Read Full Post | Make a Comment ( 22 so far )

The CPP and You: Why Facebook is A Bloody Horrible Place to Get Your Facts

Posted on August 8, 2013. Filed under: Canadian Politics, Personal, Politics, Social Justice |

BREAKING NEWS:  The sky is not falling.

Vaccines don’t cause autism, your brain is not being fried by radio waves from nearby power lines, and contrary to the message you might have received in your Facebook feed recently- your Canada Pension Plan (CPP) is not a Ponzi scheme that is stealing money from you to fund government waste and possibly leave you broke and penniless (the government left us penniless already) by the time you retire.

This message showed up in my Facebook feed today, shared by a friend who I love dearly and respect immensely.  I think it was posted with the best of intentions, but the effect was to spread a pernicious fiction about the collection, use and solvency of the CPP.

Who died before they collected Canadian Pension Plan? (CPP) old

KEEP PASSING THIS AROUND UNTIL EVERY ONE HAS HAD THE OPPORTUNITY TO READ IT… THIS IS SURE SOMETHING TO THINK ABOUT!!!!

THE ONLY THING WRONG WITH THE GOVERNMENT’S CALCULATION OF AVAILABLE CPP IS THAT THEY FORGOT TO FIGURE IN THE PEOPLE WHO DIED BEFORE THEY EVER COLLECTED A CPP CHEQUE!!!

WHERE DID THAT MONEY GO?

Remember, not only did you and I contribute to CPP but your employer did, too. It totalled 15% of your income before taxes. If you averaged only $30K over your working life, that’s close to $220,500. Read that again. Did you see where the Government paid in one single penny? 

We are talking about the money you and your employer put in a Government bank to insure you and I that we would have a retirement cheque from the money we put in, not the Government. Now they are calling the money we put in an entitlement when we reach the age to take it back. If you calculate the future invested value of $4,500 per year (yours & your employer’s contribution) at a simple 5% interest (less than what the govt. pays on the money that it borrows), after 49 years of working you’d have $892,919.98.

If you took out only 3% per year, you’d receive $26,787.60 per year and it would last better than 30 years (until you’re 95 if you retire at age 65) and that’s with no interest paid on that final amount on deposit! If you bought an annuity and it paid 4% per year, you’d have a lifetime income of $2,976.40 per month.

Another thing with me…. I have two deceased husbands who died in their 50’s, (one was 51 and the other one was 59 before one percent of their CPP could be drawn). I worked all my life and am drawing 100% from my own CPP so I am receiving the maximum allowable payment per month. My two deceased husband’s CPP money will never have one cent drawn from what they paid into the CPP plan all their lives.

THE FOLKS IN OTTAWA HAVE PULLED OFF A BIGGER PONZI SCHEME THAN BERNIE MADOFF EVER DID.

Entitlement my foot, I paid cash for my CPP! Just because they borrowed the money for other government spending, doesn’t make my benefits some kind of charity or handout!!

Remember Senator’s benefits? — free healthcare, outrageous retirement packages, 67 paid holidays, three weeks paid vacation, unlimited paid sick days. Now that’s welfare, and they have the nerve to call my CPP retirement payments entitlements?

We’re “broke” and the government can’t help our own Seniors, Veterans, Orphans, or Homeless. Yet in the past few years we have provided aid to Haiti , Chile, Turkey, Pakistan, etc., etc., etc. Literally, BILLIONS of DOLLARS!!! And they can’t help our own citizens ! 

Our retired seniors living on a ‘fixed income’ (CPP and OAS) receive no additional federal aid nor do they get any financial breaks, while our government and religious organizations pour hundreds of billions of $$$ and tons of food to foreign countries!

They call CPP an entitlement even though most of us have been paying for it all our working lives, and now, when it’s time for us to collect, the government is running out of money. Why did the government borrow from it in the first place? It was supposed to be in a locked box, not part of the general fund.

Sad isn’t it? 99% of people won’t have the guts to forward this. 

I’m in the 1% and I just did.

Holy Penniless Pensioners Batman!

We’re going to run out of money because the government is using our hard earned CPP to pay for foreign aid!  We should be making thousands of dollars per month in pension income and instead seniors are starving on a pittance! The government has been stealing money from all those people who died before collecting CPP!  The government is perpetuating the greatest financial fraud in the history of forever and ever!!!

The problem is, of course, that none of that is true.  Very little in that sad excuse for information is even remotely accurate. ( In the author’s defense- we do give foreign aid to other countries and there is a program known as CPP that many Canadians depend on upon retirement- the rest is pretty much bunk, as I’m about to demonstrate)

Let’s look at each premise in this fiction in the order that they occur…..

Unlike That Kid From The Sixth Sense,The Government Doesn’t See Dead People

THE ONLY THING WRONG WITH THE GOVERNMENT’S CALCULATION OF AVAILABLE CPP IS THAT THEY FORGOT TO FIGURE IN THE PEOPLE WHO DIED BEFORE THEY EVER COLLECTED A CPP CHEQUE!!!

First, stop yelling at me.  Please.

Second, CPP is not just a retirement pension for living people.  It has what are called “Survivor Benefits”.  As the name implies- they exist for people who “survive”.     “Survive what?”, you might ask.  Great Question!  It is for people who survive longer than their CPP contributing partner.  So dead people still get benefits, they just go to the qualifying spouse of the deceased.  Looks almost like the government thought of everything!

WHERE DID THAT MONEY GO?

Turns out it went to the surviving spouse.  Also, stop yelling.

Why I Want This Author To Measure My Penis Size

Remember, not only did you and I contribute to CPP but your employer did, too. It totalled 15% of your income before taxes. 

Where on earth did you get a figure like 15%?  The amount that comes off of an employee’s paycheque for 2013 is 4.95% to a maximum of $2356.20 per year.  This is in addition to the employer portion which is equal to the employee portion- which means that the effective maximum percentage that a working Canadian can pay is 9.9%  That, if you are keeping track of the math, is 5.1% lower than what you are claiming it is.  This of course assumes that the employee doesn’t make more than the maximum contributory earnings of $47,600. Let’s break it down so it is easier to understand:

Example 1- Joe works for Walmart. He makes $1500 gross biweekly because he is a high level manager. He will contribute $67.59 from every paycheque for a total of $1757.25 per year. This amounts to 4.95% of his gross pay.  His employer contributes an equal portion, totaling $1757.25.  This is not 15% of his earnings.  Not even close.  That amount (15%) would be $5850, which appears to be less than $3514.50 (9.9% of 39,000 less the basic exemption of $3500).  Maybe I’m wrong.

Example 2- Cindy works for the Toronto Dominion Bank.  She makes $2350 gross biweekly.  Since she makes $61,000 per year, and the maximum contributory amount is $2356.20, she will contribute $90.62 per paycheque, or just 3.9% of her gross earnings.  Her employer contributes the same, meaning she contributes $4712.41 per year- just 7.7% of her gross earnings.  This is less than 15% as well.  It is actually even less than the previous example.

There is no scenario where anybody in Canada pays 15% of their income into CPP.  None.  Doesn’t exist.

What makes things worse is that I (nor you) haven’t even paid 4.95% every year we have been working.  We have only done this since 2003.  Prior to that we paid less and the maximum contributory earnings were less.  So we paid waaaay less than 9.9% in the past- which gets you further away from that claimed 15% from the author.

Heck, before 1987 you and I only paid 1.8%, which when doubled by your employer is 3.6%  Don’t believe me?  Here is a chart from a reputable source.  That reputable source is called “The Government of Canada”, and they kind of know what they are talking about.

If you averaged only $30K over your working life, that’s close to $220,500. Read that again. Did you see where the old3Government paid in one single penny? 

Let’s frame this claim a little bit.  

First, when did you start working?  If you started working at 18 and retired at 65- and you paid the claimed 15% you would have stashed away $211,500.  That, as the author says, is close to $220,500!   That is a lot of money! 

Here is the thing though- you couldn’t have possibly made $30,000 when you started working.  Especially if you retired today.  Why, you ask?  Well, if you made $30,000 per year when you started working in 1966 then you were pretty friggin’ rich.  That is the equivalent of $216,200 in 2013 dollars- and you have been getting a pretty horrible pay cut every year since then.  Nobody averages $30,000 per year- because of this thing called “inflation”.

So let’s talk about a hypothetical guy- let’s call him “George”.  George makes $30,000 in a magical parallel universe where inflation does not exist, and he makes the exact same amount every year for his 47 year working life.  Even if he paid the maximum contributory amount for 2013 (because there is no inflation and no Consumer Price Index, remember?) he would pay a total of $221,482.80 in the 47 years he was employed.  That number looks even closer to $220,500!  But he wouldn’t do that.  Why? Because he only made $30,000 per year, and he didn’t cap out his contribution.  He actually paid $139,590 (9.9% of $1,410,000).

BTW- the government didn’t pay a penny.  You are right about that.

Entitlement is a Word.  With a Definition.  Look it Up.

We are talking about the money you and your employer put in a Government bank to insure you and I that we would have a retirement cheque from the money we put in, not the Government. Now they are calling the money we put in an entitlement when we reach the age to take it back.

Do you know the definition of an “entitlement”?  It is something you are entitled to.  Like money you contributed to your CPP!  They call it an “entitlement” because you are entitled to it- because that is what the word means.  Look it up. I’m totally not lying to you.

If “Ifs” and “buts” Were Candy and Nuts…

 If you calculate the future invested value of $4,500 per year (yours & your employer’s contribution) at a simple 5% interest (less than what the govt. pays on the money that it borrows), after 49 years of working you’d have $892,919.98.  If you took out only 3% per year, you’d receive $26,787.60 per year and it would last better than 30 years (until you’re 95 if you retire at age 65) and that’s with no interest paid on that final amount on deposit! If you bought an annuity and it paid 4% per year, you’d have a lifetime income of $2,976.40 per month.

IF you paid $4500 per year (hint: you don’t)

IF you got 5% interest on your money (hint: you won’t)

you will have lots of money.  Got that?  “Ifs” are awesome!!!!

What you end up with instead is this:

You started working in 1966 at the age of 18.  Let’s say you contributed the maximum amount to CPP every year you were working……

you should end up contributing (with your employer’s contribution) around $89,800 by your retirement in 2013.  $89,800!

But you only paid half that!  Remember that you were matched dollar for dollar by your employer.  So you paid $44,900!

Surprised?

Now let’s say you live to be 85….

If you take your $89,800 and divide it by 20 that is $4490 per year, so you are getting a pension cheque of $375 per month just to equal the total contribution amount. What if you only live to the age of 78?  Then you need to get paid $575 to equal all the money you and your employer contributed together.

Remember though, this includes the employer co-pay that you must insist is your money for this to work.

So the question is this: What is the maximum CPP benefit cheque available to a retiree 65 years old in 2013, since this amount was calculated on a maximum contribution to CPP every year since 1966?

Do you want to guess?

C’mon, guess……

$1012.50

So you need to live for 7 and a half years to just break even assuming your employers contribution was your money!

The average CPP pensioner gets a cheque for $596.66, and in a world where everyone paid in the maximum contribution and drew the average amount of CPP- it would take 12 years to break even.

So let’s think about that for a second.  In this world where we get ripped of by CPP, everyone pays the maximum amount and nobody survives past the age of 77.

That would be a truly shitty place to live.  Good thing nobody lives in that world.

So what would happen if you took just your contribution ($44,900) and invested it for 47 years at a compound interest rate of 5%?  Well, I’m not going to make a long table with differing yearly contributions, so let’s just take the average yearly personal contribution ($955.31-but remember that in 1966 your actual yearly contribution was $180!) and invest $79.60(the average monthly contribution) per month for 47 years and see what we get.

It turns out that you get $190,204.89.

Again, if you paid in the maximum contribution and drew just the average CPP cheque, it will take you 26 and a half years to be better off with CPP.  You will be 91 years old.  Which is pretty old, but remember that nobody pays the maximum and draws the average. Nobody.  Not you, not me.

I Should Be Making $3000 A Month Because I Am Attracted To Sickly People

Another thing with me…. I have two deceased husbands who died in their 50’s, (one was 51 and the other one was old259 before one percent of their CPP could be drawn). I worked all my life and am drawing 100% from my own CPP so I am receiving the maximum allowable payment per month. My two deceased husband’s CPP money will never have one cent drawn from what they paid into the CPP plan all their lives.

What is that you say?  You are drawing the maximum amount of CPP by yourself?  So you are getting $1012.50 per month.  Is it possible that you might live for four years after you start cashing in CPP?  Good.  Then you will be getting 100% of the money you personally paid into CPP.  Every month after that is gravy.

Calculate it with me.  I’m going to assume that you paid the maximum amount into CPP from 1966 till now, and that you retired this year at the age of 65.  This would give you the maximum amount of your own money invested into CPP.  You paid about $44,900 of your own money and if you draw $1012.50 per month it will take you 45 months to recoup your investment, or just shy of 4 years.  If you live for 7 years you got back every penny of you and your employer’s contribution.  If you live 12 years you got all the money you and your two husbands put into CPP and more!

So maybe you are just thinking about this the wrong way.

Everybody Else Is Getting Rich And I Get Nothing (Except $1000/Month)

THE FOLKS IN OTTAWA HAVE PULLED OFF A BIGGER PONZI SCHEME THAN BERNIE MADOFF EVER DID.

No. No they didn’t.  I don’t think that word means what you think it means. Also, stop yelling at me.

Entitlement my foot, I paid cash for my CPP! Just because they borrowed the money for other government spending, doesn’t make my benefits some kind of charity or handout!!

If you don’t think you are entitled to it, that is your issue- not mine.  Your money goes into a trust that the government can draw from, yes, but they have to pay you a retirement dividend with it.  They don’t get to keep the money.  For example, I donated $1200 last year to various charities and as far as I know none of them are cutting me a moonthly stipend when I retire.  If you think CPP is a charity- I don’t think that word means what you think it means.

Remember Senator’s benefits? — free healthcare, outrageous retirement packages, 67 paid holidays, three weeks paid vacation, unlimited paid sick days. Now that’s welfare, and they have the nerve to call my CPP retirement payments entitlements?

First, you get free healthcare, a retirement package, and two weeks paid vacation while you are working.  You are entitled to those things by virtue of being a Canadian citizen.  Also, they call your CPP an entitlement because, again, you are “entitled” to it.  

We’re “broke” and the government can’t help our own Seniors, Veterans, Orphans, or Homeless. Yet in the past few years we have provided aid to Haiti , Chile, Turkey, Pakistan, etc., etc., etc. Literally, BILLIONS of DOLLARS!!! And they can’t help our own citizens ! 

ZOMG!  We’re broke?  Oh noes! 

The government doesn’t help seniors?  Really?  Were you not just whining about how the government is giving money to….wait for it…seniors? Veterans?  We don’t help veterans?  Really? One of my best friends was disabled as a paratrooper, and he might beg to differ on your definition of “help”.  Orphans and the homeless are helped by specific programs, too.  We give foreign aid, and we give domestic aid.  Take your xenophobic bullshit elsewhere.

The rest of the post is stuff we have already been over, so I won’t bother rehashing it over again.

Turns out on further investigation that this post is an adaptation of a Letter to The Editor which is an adaptation of a rant about U.S. Social Security.  There is a more parsimonious knockdown of the original at Snopes.com which makes many of the same points I made here.

References and further reading:

Average and maximum CPP payments

Compound Interest Calculator 

History of CPP- Wikipedia

Inflation Calculator

CPP contributions, maximums and exemptions

Contribution rates 1985-2006

Contribution rates 1966-1984

Will Canada Pension Plan Be There When You Retire?

Read Full Post | Make a Comment ( 13 so far )

Liked it here?
Why not try sites on the blogroll...