Interest Rate Policy Increasing Poverty Among Seniors

According to a new report, the number of seniors living in poverty soared almost 25 percent between the years 2007 and 2008.

Women have been the most affected. Up to 80 percent, suggests the report.

Daphne and I are, or soon will be, counted among those women.

At 60 years of age we don't yet officially qualify as seniors. However, with the Bank of Canada having kept interest rates ridiculously low over the past several years, we will be among the poverty statistics for seniors in future reports. Many of our friends already are or soon will be.

We are the women who worked for decades in low-paying 'female' jobs while child-rearing. We are the women who, out of our low incomes, scrimped and saved knowing that nothing was sure for tomorrow.

Now we are punished for saving because of an interest rate policy that values consumption, debt and a head-in-the-sand mentality over thrift, responsibility and the urge to maintain self-reliance.

The following is an excerpt from one woman's story. It could be duplicated many times over, by many other women:

I am tired. I have been working since I was 14. When I retire at 65, I’m going to have this little tiny government handout. It won’t matter how resourceful I’ve been. There’s no financial reward for that...

I am one of the working poor. The reward for that is more poorness. It's, "Sorry lady, you did a really good job. You raised those kids. You were only on Welfare for eleven months. Good for you, good for you - here are your pennies" (p47).

When will the Bank of Canada stop its insane interest rate policy? The result has been consumer interest rates so low that they don't even keep up with inflation. No surprise, then, that the people most dependent on hard-earned savings, largely senior women, are falling behind.

[Cross-posted at economicus ridiculous]

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Interest Rate Policy Punishes Most Vulnerable

The Bank of Canada's interest rate policy punishes saving and rewards debt. As does the federal government when it bails out "too big to fail" corporations and industries and rescues banks from the results of their rash decisions.

Such policies punish those people who scrimp and save, who put off buying today so they'll be able to live tomorrow. Many of these people are now in, or about to enter retirement; only to find their savings earning one or two percent or, if they're particularly fortunate, 2.5 percent.

Such people dare not put their savings into the markets, not when their lives are reliant on those savings. We have all seen what happens to the markets.

How did Canada get things so ass backwards?

How did Canada get to rewarding people who buy like there is no tomorrow? Who get mortgages they can't afford? Who purchase more automotive and recreational vehicles, gadgets and gewgaws, vacations and cruises than they could ever use?

Too many seniors today are struggling to make ends meet because their hard-earned savings are earning less than the increases to their living expenses, such increases exceeding the cost of living. (For most seniors, some form of disability is present.)

This situation, the erosion of seniors' and others' savings, is thanks to the interest rate policy of the Bank of Canada.

It's downright criminal. It also costs governments.

For anyone on some form of financial assistance - for example, disability benefits, seniors' Guaranteed Income Supplement - any personal income, including that of interest from savings, must first be taken into account. The lower those earnings or income, the more government pays.

[Cross-posted at economicus ridiculous]

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Gracious Thanks Extended

Recently, friend Ocean's monetary income was enriched, as she had applied and has received, Canada Pension Plan benefits and the Supplement for Elderly Renters. Her quality of living soared.

For those of us living in financial poverty, it is a real relief when our fortunes improve. It also gives us the opportunity to say thank you to all who support us along the way. Ocean has done this in the form of a letter to the editor of one of our local papers. Here it is, in full.

Generosity makes this best place to live
Chrystal Ocean, The Citizen
Published: Wednesday, November 17, 2010

I am a woman who lives daily with debilitating chronic pain, the result of the wear and tear of everyday life on a childhood injury.

Having turned 60 this summer, now I qualify for two important government programs. Now my annual income has gone from $7,200 (all my tiny savings could manage) to $10,000.

Now I receive a small monthly payment from the Canada Pension Plan, a contribution to my income I earned from a lifetime of work.

Now I am getting monthly help with my rent in the form of the Supplementary Aid for Elderly Renters, a provincial program. I am immensely grateful for S.A.F.E.R. It goes beyond description the degree to which this help has lessened my daily stress.

But it's the local resources and the people of this Valley I most want to thank.

Keeping one's head up when economically challenged can be difficult in a society that treats the dollar as god; and it can be difficult at times accepting kindness because it reminds you of how far you've fallen.

It's also a constant challenge accepting your own limits.

Without the kindness of people of this Valley, the quality of my life and the lives of so many others would be far worse. Many of us would be dead.

Beginning late last year, I began visiting the food bank every few weeks to get bread. Never anything else. Just bread. Prior to such visits, I'd stopped eating bread altogether. The price of the ingredients to make my own bread and the prices of loaves sold in stores were prohibitive. Bread didn't seem as essential as fruit or vegetables.

In the early days, my visits to the food bank were hit and run. I'd skulk in through the back door, avoiding eye contact, grab some bread and skulk back out. I was embarrassed to have to use this resource.

Now I don't skulk. Now I might stop to have a coffee, perhaps something to eat if a colourful salad catches my eye, and even a chat.

To the many people of this Valley who contribute bread and other foodstuffs to the food bank: thank you.

To the people who maintain the food bank, including Dave the cook (other cooks' names I don't know), and the driving force behind it, Betty Anne Devitt: thank you.

To the local grocers, to stores selling general merchandise including food, to independent bakeries and to home bakers, and to the many others who contribute to the food bank: thank you.

To Karyne Bailey, the woman behind Cowichan Valley Recycle ReUseIt, a wonderful online resource through which people of this Valley -- 1,151 members and climbing -- can obtain and give away stuff for free: thank you.

At the heart of CVRReUseit is recycling. Countless times I've received items I'd been going without, including basic kitchen equipment and bedding; and I've been able to give away items to people who needed or wanted them.

To Jenny, who brings me free eggs every couple of weeks: thank you.

To Daisy Anderson, who takes me along on grocery trips and changes my hard-to-reach light bulbs: thank you.

To Daphne Moldowin, who knows what it's like to live this way and helps me refocus when I'm down: thank you.

To the people who together make the Cowichan Valley one of the best places on earth to live -- for all of us: thank you.

Chrystal Ocean,
Duncan

While I was reading it, I was thinking about the many other people out there who use the services provided that give a helping hand. Ocean's letter brings alive a real person to the nameless others who also use these services. Her letter shows an intelligence not often associated with the 'needy'. Ocean's letter indicates to me that she is graciously grateful.

Well done.

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On Liberals' Proposed National Food Policy

Don't be fooled by the big numbers. Here's what the Liberals propose to be included in their national food policy as reported by the CBC:

* $50 million to improve food inspections and ensure imported foods meet domestic standards
* $80 million to promote farmers markets and local food
* $40 million to help 250,000 low-income children get healthy food (my emphasis)

Let's look at that last one, shall we?

Any program has administrative costs, so it's not clear that the entire $40 million would go to 250,000 children. However, let's assume it does.

The numbers reduce to this: $160 per year per child, or $13.33 per month, or 44 cents per day.

Wow.

Food costs are higher where people of low income live. Most of us haven't the means - a vehicle or bus fare - to get to where the bargains are. We must walk everywhere or transport ourselves in a four-wheeled scooter (if we're so fortunate to have one and live in a building that provides plug-in facilities). If we've a scooter, then accessibility to, from and in stores becomes a further barrier.

How much do you suppose someone can buy for 44 cents in a neighbourhood where there's only one grocery store and accessibility for people with disabilities is an issue?

Here's another bone to pick. Children under a certain age don't have income. Their parents or guardians do.

You can bet that hungry children have even hungrier parents. Parents will deprive themselves first of food before they'll let their children starve.

Politicians and poverty activists should stop the "child poverty" crap. Because you can't lift a child out of poverty unless you treat the whole family - hell, unless you treat the whole community.

Incidentally, by the time the Liberal plan would come into being, inflation would have eaten up all or a good chunk of that 44 cents.

[Cross-posted at economicus ridiculous.]

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Few "Eligible" Taxpayers Contribute to RRSPs

The headline cracked me up: Study finds few eligible Canadians contribute to RRSPs.

Barely a third of Canadians who were entitled to make an RRSP contribution last year did, and the total amount contributed was only six per cent of what it could have been, Statistics Canada reported yesterday.

I've been deemed eligible to contribute to an RRSP every year since RRSPs came into being. But for the past eight years, my income has averaged $8,500 annually - that's right, $8,500 annually.

Where would anyone expect a person like me to find money to put into a RRSP; someone who, most years, doesn't even make enough to pay federal or provincial income tax?

Perhaps what's needed is for the eligibility criteria for participation in the RRSP program to be examined, rather than making it appear that taxpayers, particularly low income taxpayers, are clueless about the purported benefits of RRSPs.

Said benefits do not accrue to all RRSP participants. In fact, there can be a cost for those whose total household income is in the lowest two quintiles of income.

Rather than not contributing to a RRSP because they don't know any better, most low income earners are either too strapped to participate or know better than to give their hard-earned dollars to a program which benefits the more affluent at the expense of themselves.

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