Canadian government to fall

[Krill]

I would like to see an OECD list that includes the last 8 years of Labour governance, please.

[Ben Kenobi]

A single payer healthcare system has vastly lower administrative costs than a US-like Balkanized insurance system. Our system is extremely inefficient. If we switched to a single payer system, there'd be easily enough in savings to insure everyone currently uninsured according to various studies (i.e. by the US GAO).

You are right that centralisation and economies of scale that can be found in the Canadian system, are areas in which things are more efficient here. However, the fact that there is no competition drives costs up, since there is no incentive to lower costs and become more productive.

[Ben Kenobi]

Then you're daft. That's all I can say. Social programs are essentially insurance programs, just run by the government. All insurance schemes are redistributive - that's the point of insurance. Taxation for welfare is just compulsory insurance (and it has to be to avoid market failures).

Thank you. This was exactly my point. The great majority of the government programs are redistributive, in that they tax higher earners in order to help those less fortunate.

The idea is not to tax people more to even out incomes. The idea is to fund services that only government can provide effectively. The fact that Canada has a progressive tax system is because the lower ones income the higher the real cost of taxation. You take 10 bucks from someone who has 100 and it's a big deal. You take 10 bucks from someone who has 1000, not such a big deal.

The fact that Canada chooses to have a 'progressive' tax system is a sign that these programs even out incomes. With a flat tax, you would not see this, as you would be rewarding those who take the time and effort to work. By taxing the higher earners more, you discourage folks from choosing to work hard, and you increase tax evasion. Why should someone who makes a great deal of money have to pay so much more for services he is not going to use? Granted it is a big deal, but if you can ensure greater compliance with the income tax, you can actually decrease the tax rates without losing any revenue.

Come back when you have done some basic economics and have a clue about how modern societies actually work.

Oh, I'm doing quite well in my basic economics course Aggie. However, I don't see how this has any bearing on the arguments which I have posted here.

Crap. Markets fail. Please look up market failure in an economics textbook.

Yes, a working economy should expect to see market failure, in that businesses that are inefficient will go out of business. In preventing businesses from going under, you are hurting everyone, most of all, the consumers.

Yes they do. You don't know what you are talking about... again. You conservatives are just so mind numbingly ignorant that it beggars belief. Ever heard of a natural monopoly?

Private health insurance generates massive overheads. Why do you think that Americans are moving to HMOs? For the same reason: efficiency. State run health care is even more efficient than these since it can cut down on adverse selection and moral hazard problems much more effectively than private companies can.

They are more efficient in some aspects, at the costs of others. You distort the prices, when you have a monopoly, since they no longer reflect the cost it took to produce the good. That is the long term problem with any monopoly, since the government will regulate the price in order to prevent the monopoly from raising it's price exorbitantly.

The same idea of a natural monopoly applies to many other industries, such as railroads, anything with an extremely high capital cost.

Again... competition does not necessarily produce efficiency. In fact, in certain circumstances it produces massive inefficiencies (called a race to the bottom).

Or when in an oligopolic market, the major businesses collude to fix the prices. That's the flip side of a price war, Agathon.

Again I suggest that you and tiger boy actually educate yourselves about this before spouting off about something you know nothing about.

Intresting. I have refrained from insulting your education and targetted your arguments. I suggest that if you have anything of substance to say, that you do the same.

I assume you are ignorant about the topic because you have got it wrong here. Market failure is not inefficient businesses failing - that is part of a successful market. Market failure is defined as when markets do not produce an efficient distribution of goods. It's a completely different thing.

Thank you. I wasn't sure what you meant by market failure, since you never explicitly defined the term. Folks do refer to unemployment and business failures as market failures, and it is good to see that you accept this as part of the normal way for things to work.

There are plenty of arrangements where markets fail to produce a good efficiently, but not under perfect competition.

Because of market failures.

Then please show me how a perfectly competitive market produces these inefficiencies.

Canada has a higher standard of living than the US.

According to whom? The UN?

Oh for God's sake. How did you ever get a university degree? This is complete crap.

The government makes massive contributions to the efficiency of the economy. In its regulatory capacity alone it makes markets possible. In its capacity as the corrector for market failures it also compels people to pay for services that they want and need, but which a market will not provide at an acceptable level.

All true. However, how are these in any sense 'productive' activities? You are right that regulations result in an increase in efficiency, however, they do not produce wealth by themselves. Someone has to decide to fund these regulatory bodies in the first place, or they will not be able to do their job.

This includes health care, education, policing and defense. All things that have significant externalities and are especially subject to market failures: that's why the state provides them. States have provided all sorts of other things for similar reasons. Sometimes circumstances change and markets become possible where they were not before (like when NZ privatized its telecommunications), and sometimes new circumstances create new failures (which entails some form of nationalization or more regulation).

Granted, I agree with you completely that it is often in the best interests of society for the government to fund large capital projects, especially given their access to large amounts of labour. The reasons why many of these things are difficult to provide privately, is for the reason you cited, that folks derive benefits from them without having to pay for them. However, you must also recognise that even though there are benefits to this arrangements, there are disadvantages, in the form of diminished competition.

The state produces all sorts of goods. Your statement is typical ill-informed right wing garbage.

Where would the state come up with the funds to provide these services without direct taxation? The only other way is through customs taxes.

Right wing garbage?

[Ben Kenobi]

People donate to charities because they value their work. Most people do not like living in a society where people are starving on the street, or where the elderly can't heat their homes properly. Rightly, they think that everyone's lives would be improved if we could rid ourselves of these social evils.

Granted.

But private charity is subject to market failure. Because every dollar you give to charity benefits everyone else, there is a significant positive externality. Every economics student knows that when there is a positive externality, we will tend to underproduce the good in question. With respect to charity this is because everyone else gets to free ride off of your charitable donations - they get as much benefit from it as you do. The result, people don't give an optimal amount to charity.

I agree with you wholeheartedly, we tend to underproduce in a market economy, since it is by definition impossible to meet the demand. Demand for these things increases beyond the capacity any funding.

Wouldn't it be better if everyone could be compelled to donate a certain amount to charity? That way everyone would get something they want (a nicer and more decent society) and no potential donor would be able to free ride on the charitable contributions of others.

For the same reason I believe that everyone ought to be free from tithes. Surely, if you believed that everyone ought to be compelled to part from their money to support good causes, you should also support mandatory tithing. However, in most modern societies, we acknowledge that freedom of conscience is more important, and that folks ought to freely give to charity rather then being forced to give.

But wait... that's just what welfare is. Welfare benefits both the people who receive it and the people who pay for it. It's a win win situation. The only reason people moan about it is that they hope that they can get away without paying and not have the bad stuff happen. But that's having your cake and eating it too. We all know what that means.

True, however you cannot meet the demand for welfare, regardless of the benefits you provide. If the government increased the welfare benefits, you would still see poor people on the streets. People moan because they see the problems with welfare everyday, and ask themselves if it would be better to give them food and shelter rather then cash.

[Ben Kenobi]

Interesting. I suppose the lot of us young folks aren't counting on the public institutions to be around for us. Used to see that with the Canada Pension Plan, but health care is another wrinkle.

[Agathon]

Originally posted by Ben Kenobi

You are right that centralisation and economies of scale that can be found in the Canadian system, are areas in which things are more efficient here. However, the fact that there is no competition drives costs up, since there is no incentive to lower costs and become more productive.

You're missing the point. When market failure occurs the costs go up. The very same incentives that make markets work efficiently in some areas make them work ineffciently in others.

[Agathon]

Originally posted by Ben Kenobi

For the same reason I believe that everyone ought to be free from tithes. Surely, if you believed that everyone ought to be compelled to part from their money to support good causes, you should also support mandatory tithing. However, in most modern societies, we acknowledge that freedom of conscience is more important, and that folks ought to freely give to charity rather then being forced to give.

Again, you are missing the point. You have to force people to give, because leaving it voluntary throws it back upon the market. And given that the problem is caused by market failure, you cannot do this and expect a decent result.

True, however you cannot meet the demand for welfare, regardless of the benefits you provide. If the government increased the welfare benefits, you would still see poor people on the streets. People moan because they see the problems with welfare everyday, and ask themselves if it would be better to give them food and shelter rather then cash.

Really? I lived in New Zealand for 25 years and during that time I saw three homeless people.

[Agathon]

Originally posted by Ben Kenobi

Thank you. This was exactly my point. The great majority of the government programs are redistributive, in that they tax higher earners in order to help those less fortunate.

All insurance schemes redistribute to help the unfortunate. That's the point of insurance. It's no different whether you make it public or private: it's still insurance. Are you going to ban private insurance because it is redistributive?

Are you going to stop everyone funding the police on the grounds that only the unlucky victims of crime utilize their services?

But you are simply wrong in stating that the function of government is to tax the rich to fund the poor. Given the massive inequality in Canada, it does a very poor job of that.

The point of taxation is for the most part not to take money from the rich to give to the poor, but to compel people to pay for things that they need. Again, if we left it up to the market, these things would not be provided. Everyone has a stake in having efficient policing, yet left to the market, we would have lousy policing because domestic security has significant externalities that would entail underproduction if left to the market.

Even if everyone earned exactly the same amount of money, there would still be a need for taxation to ensure that certain goods were provided because of market failures.

That's why we pay tax - it is for the most part not poor relief.

The fact that Canada chooses to have a 'progressive' tax system is a sign that these programs even out incomes. With a flat tax, you would not see this, as you would be rewarding those who take the time and effort to work.

That's retarded. A flat tax generally means that everyone is taxed at the same rate (and marginal taxation would have to be abolished). The rich still pay more than the poor under a flat tax.

By taxing the higher earners more, you discourage folks from choosing to work hard, and you increase tax evasion. Why should someone who makes a great deal of money have to pay so much more for services he is not going to use? Granted it is a big deal, but if you can ensure greater compliance with the income tax, you can actually decrease the tax rates without losing any revenue.

This is false. People tend to work even harder to make up the lost income. This whole "discouragment" thesis is a myth. People who are going to cheat the taxman will do so irrespective.

Oh, I'm doing quite well in my basic economics course Aggie. However, I don't see how this has any bearing on the arguments which I have posted here.

I'd fail you. Market failure is a basic economic concept, one which you seem completely ignorant of.

Yes, a working economy should expect to see market failure, in that businesses that are inefficient will go out of business. In preventing businesses from going under, you are hurting everyone, most of all, the consumers.

BEN!!! WAKE THE HELL UP!!! THAT IS NOT WHAT MARKET FAILURE IS!!!! INEFFICIENT BUSINESSES FAILING IS NOT A SIGN OF MARKET FAILURE, IT IS A SIGN OF THE MARKET DOING IT'S JOB PROPERLY!!!

Can't you read? I said this above.

They are more efficient in some aspects, at the costs of others. You distort the prices, when you have a monopoly, since they no longer reflect the cost it took to produce the good. That is the long term problem with any monopoly, since the government will regulate the price in order to prevent the monopoly from raising it's price exorbitantly.

You are acting as if there is some other alternative. There isnt. The only alternative would be the market - and that fails in these areas.

Intresting. I have refrained from insulting your education and targetted your arguments. I suggest that if you have anything of substance to say, that you do the same.

I'm pissed off because you have completely missed the point three times now. My patience (which is not extensive) wore out after the first.

Thank you. I wasn't sure what you meant by market failure, since you never explicitly defined the term. Folks do refer to unemployment and business failures as market failures, and it is good to see that you accept this as part of the normal way for things to work.

I mean by it what economists mean by it.

There are plenty of arrangements where markets fail to produce a good efficiently, but not under perfect competition.

Economics 101: there is no perfect competition in the real world.

Then please show me how a perfectly competitive market produces these inefficiencies.

See above.

All true. However, how are these in any sense 'productive' activities? You are right that regulations result in an increase in efficiency, however, they do not produce wealth by themselves. Someone has to decide to fund these regulatory bodies in the first place, or they will not be able to do their job.

Slap yourself in the head. Markets don't make anything either, they just produce a more efficient allocation of goods in some areas. Regulation does the same thing where markets fail.

We fund regulatory bodies and we fund state utilities. The state produces health care and education. We need these things. Similarly truck manufacturers make trucks, which we need. In one case people individually choose to fund the truck maker, in the latter case people collectively fund the state. Tax is just that proportion of our incomes that we spend collectively. We do so because spending it individually would lead to market failure.

Granted, I agree with you completely that it is often in the best interests of society for the government to fund large capital projects, especially given their access to large amounts of labour. The reasons why many of these things are difficult to provide privately, is for the reason you cited, that folks derive benefits from them without having to pay for them. However, you must also recognise that even though there are benefits to this arrangements, there are disadvantages, in the form of diminished competition.

Where market failure exists, competition is destructive. We want to get rid of competition in these areas because it doesn't work.

Where would the state come up with the funds to provide these services without direct taxation? The only other way is through customs taxes.

Oh jesus....

You don't understand how the economy works at all, do you? A market is fundamentally a swap shop. Companies make goods. The state makes goods. Some people work for companies, some for the state. They swap the stuff they make because each needs what the other has. The only difference between the state products and the private products is that everyone else is compelled to swap a certain amount of their goods with the state employees, because if they weren't so compelled, those goods would not be produced at all. Once that portion of necessary swapping is out of the way, people are free to swap for whatever they like, because in the remaining portion of the economy markets don't fail.

You simply do not understand how the economy works. This is a common failing of right wing people (to be fair many on the left share your bizarre idea about tax being primarily a form of poor relief). The difference is that the left wing people (apart from the Canadian Communist Party - and even they aren't in the short term IIRC) aren't advocating the demolition of the economy.

[Agathon]

Originally posted by notyoueither


Actually, the majority of the federal budget gets spent on things the federal government is not responsible for providing.

Health, education, welfare... are all jurisdictions of the provinces.

The GoC get involved to redistribute wealth, not only from one income level of Canadians to another, but from one region of Canada to another. The fed dishes out the cash, and the provinces deliver.

But of course you knew all this already, given that you have your nifty, new 'market failure' toy that explains everything and even cures warts. Right?

Respond to this, please, Aggie. [/QUOTE]

It doesn't matter. Federalism complicates matters, but the essential point is sound.

I didn't respond to this because it was such a dumb post. Are you happy now?

[Agathon]

Originally posted by notyoueither
Yes, and what the insurance companies spend on drugs, together with premiums paid (or at least the difference) would be included in private health expenditures.

Are you being idiotic on purpose? The production of pharmaceuticals is no different than the production of beds, or syringes or whatever. It's irrelevant since these things don't suffer from market failure.

[Agathon]

Originally posted by Peter Triggs


I partly disagree: the market is still there but the government has given itself the role of a monopoly supplier of healthcare provisions. The waiting lists one often encounters in the process of demanding these provisions show that here we have an example of market failure.

It can't be a market failure because there's not a market. We just don't spend enough on health care to meet our needs. Privatizing it will just make things worse. It's thanks to tory cretins that we have the stupid tax debates that we do, which have no bearing on why we actually pay tax or how the economy actually works.

-----------------

I read the rest of your crud NYE. Since you seem incapable of understanding the elementary point of economics that is at issue, I can't be bothered explaining it again. Read it again if you like. Perhaps having it transcribed in orange crayon might help. Go back to being a public house blowhard... I'm sure you'll have a rapt audience of fools.

Amazing how I seem to be able to continually overestimate the intellect of tired old tories.

[Kuciwalker]

Market failure! Market failure! Market failure!

[Agathon]

Originally posted by Kuciwalker


Market failure! Market failure! Market failure!

Go to one of your bathrooms son...

It's shameful to have to repeat the same point over and over again. But when confronted by the economic equivalent of flat earthers, it becomes necessary.

[Tingkai]

Originally posted by Ben Kenobi


Oh, that's very true when the top 20% of Canadians earn much less then their compatriots in the states. 20% of folks graduate with a degree. You do the math.

Wrong again. You assume a direct link between the 20% of Canadian income earners have degrees. That a false assumption. The people who are rich are often rich because they inherited money from their parents, rather than because of education, e.g. Belinda Stronach. Or they become rich without a university education, e.g. hockey players or entrepreneurs like Honest Ed.

[Ben Kenobi]

Wrong again. You assume a direct link between the 20% of Canadian income earners have degrees. That a false assumption. The people who are rich are often rich because they inherited money from their parents, rather than because of education, e.g. Belinda Stronach. Or they become rich without a university education, e.g. hockey players or entrepreneurs like Honest Ed.

Interesting. I had hoped you would have spotted the I know that the answer isn't as simple as that, since not all graduates are going to make plenty of money, and certainly, folks make money without having to go to school. However, for those who do go and complete their education, they are going to do better on average then the folks who will not, rather substantially.

For every Belinda Stronach, there's another 10 folks who finish with their degree and go on to do quite well for themselves, without having the silver spoon in their mouth.