Thursday, July 23, 2020

Alberta Government and Doctor Pay

 There has been a nice little debate in Alberta regarding the pay of doctors, in particular between the left NDP and the UCP conservatives. For the non-Canadians out there, Canada has single payer healthcare, which means there is a single payer of healthcare - the government. Of all the schemes out there, single payer is the most immoral universal health care, but that is a topic for another day.

The conservatives are contending that doctors are way overpaid and must take a pay cut for the sake of helping with the massive budget deficit that Alberta is suffering from. They do have a point. Alberta pays much more than comparable provinces. Alberta also has much lower taxes and much lower real estate costs, so I've seen it argued by the partisans that they're not going to leave because they simply won't be better off.

The NDP contend, when it comes to any government cut, that it is necessary to pay these prices to have the highest quality doctors. Wow, a far left party that actually understands a basic economic principle - that to get the best you have to pay a higher price. If only they conceded this when it comes to the income taxes they'd like to impose on doctors.

The Mixed Economy Effect

This discussion, as a capitalist on the sidelines, is interesting to watch. In Nova Scotia, as an example, this discussion has come up too. Ironically the conservatives and left are on the opposite side. Leftist proport that doctors should want to work for lower pay. That living in Nova Scotia, and doing their duty is more than enough reason to work there - Nova Scotia being an amazing place is pay enough - ignoring the fact that pay is bad, hours are bad, you're taxed to death and you live in a mainly rural province with no real city life.

How much should doctors be paid? Should they be paid at comparable wages to other provinces? Should they be paid comparable to the US, where they make much more?

The reason we can't come up with a number is that the market place for doctors has been prohibited in Canada. Prices, ie: doctor pay, requires an actual market place to come up with real numbers. As it stands, a doctor should be paid as much as the political might of opposing groups will allow.

There is a point to be made about brain drain that Canada suffered from greatly in the 90's. You can't shaft the talented and productive people. Not only was the governments (federal and provincial) mismanaging money, spending like no tomorrow and taxing anyone that had talent to make decent money - they caused an exit. The brightest and most productive people went south where they could earn more, pay less taxes and most importantly not treated as some sacrificial lamb to be looted at will. This is something that should be avoided at all costs.

We Need a Medical Marketplace

The grip of single payer healthcare needs to be broken. A private system needs to, at the very least, be allowed to exist in parallel with the public system. Doctors should be able to pursue market opportunities without the government dictating the terms. Instead of a union and government coming up with an equitable category based style of pay, a doctor can be rewarded for their talent and skill.

This is the only way to at least figure out what is proper for pay. This may result in doctors being paid more, or less, but at least we'll know what doctors should be paid instead of treating them as sacrificial lambs to just serve the public at whatever cost is deemed appropriate.

Saturday, July 11, 2020

A Depressing Look at Government Spending

 As a fun little exercise I thought I’d sit down and calculate government spending per person. The only difference is that I wanted to get everything. Often politicians talk about operating budgets and the deficits on that, but that isn’t the whole picture. There are capital budgets too.

Government is paid for by the taxpayers, so everything on the table. I did this for a person living in the City of Calgary, in the province of Alberta and obviously living in Canada. These numbers absolutely shocked me beyond recognition. It illustrates a spending problem that is far beyond our control. People act like raising taxes a little more will solve these issues, they won’t.

These numbers are presented informally. I’m not going to source each budgetary page, as I wanted to get the broad numbers. Some of these numbers are the estimated costs rather than the actual costs for the fiscal period of 2019. You can look up these values yourself and they may vary slightly, but don’t take away from the staggering end result.

I realize some would argue that capital budgets are for one time purchases, true enough, but when capital budgets are developed over periods of 3-5 years, are always there and never small – they are a systemic part of the cost of government. It’s not like billions are spent one year and the next 10 years is a small capital budget. There are always large capital budgets. I also want to know that some capital buildings produce some revenue. Most hospitals will have a coffee shop and convenience store tenants that pay rent. A skate park doesn’t result in any revenue. Taking a look at some of the numbers, it seems like revenue generated from capital projects will be in the range of 10-15% of the capital budget.

Calgary

ITEM
Capital Budget 2019-2023 (5 years – $5.3 billion)$1.06 billion/year
Operating Budget 2019-2022 (4 years – $17.2 billion + 92.9 million one time)$4.32 billion/year
Estimated Population1,560,600
Total Cost$5.38 billion/year
Cost per Person$3447.40

Alberta

ITEM
Capital Budget (3 years – $19.3 billion)$6.43 billion/year
Operating Budget 2019$58.720 billion
Estimated Population4,428,427
Total Cost$65.15 billion/year
Cost per Person$14,711.77

Canada

ITEM
Operating Budget 2019$346.182 billion
Estimated Population37,000,000
Cost per Person$9356.27

Total

TOTAL PER PERSON (ALL SPENDING)$27,515.44 PER YEAR

This is a devastating number to see. If you live in a city in Canada, this is roughly the government spending. Government money comes from taxpayers, so this is the expected obligations of taxpayers. This number I’ve calculated is for each person that exists in the country, province and city. Not everyone works and pays taxes, so the number is more crippling and awful than shown. At the end of the day, how could anyone pay this much, every single year? It’s not like you can “get the rich” or “tax businesses” as if that solves the crippling aspect of the number. The economics have been settled on soaking the rich and it doesn’t work.

This depresses me. Solving this problem is next to impossible with the state of the world and the irrationality of the average person. Plus the added demands of more and more spending demands. Even if we were to get all governments to cut spending in half, it’s still a ridiculous number.

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