Where were you when President Kennedy was shot? Or, a timelier example, when the twin towers went down a year ago? How about 10 am on November 28, 2002 when the Romanow report hit the streets?

Yes, it is a very long stretch to wrap these three events together - but to judge from today's unmistakable media frenzy, an earthquake is currently passing under our feet. The political implications of the Romanow recommendations may be like seismic waves to the media but the economics of the plan is plain and simply: status quo plus-plus-plus.

It is status quo in the sense that there is a call for more funds and more scope for the public health system - this trend to higher and broader spending is as old as Tommy Douglas' legacy. It is also status quo in crafting a communications plan that emphasizes health care as an emotional, value-laden and nationalistic good. To oppose more funds and more nationalization of health activities is seen as both unpatriotic and somehow immoral. Finally, it is status quo in absolutely refusing to reform the demand and supply aspects of health care provision, in favor of rhetoric that shoots down the merits of competition and choice, personal responsibility and consumer rights.

Well, in the spirit of plain and honest commentary, two virtues when it comes to economic analysis, here are some areas where Roy Romanow's report goes completely offside with respect to sensible economics:

•Sustainability. One of the report's main contentions is that the system needs more money and this can be done without any great effort. The underlying tone is that politicians are failing the people, that it is an absence of will that keeps money away from system providers.

Au contraire, the numbers say otherwise. According to CIHI, federal keeper of health statistics, the latest five year period has seen the fastest after-inflation growth in twenty years to the highest ever level of spending per person. This is not a system starved for funds.

•The Romanow $8.5-billion expansion of the health envelope (to home care, drug provision, rural services, diagnostics and primary care) will ramp up the spending even more, leading to an anticipated level next year that will be exactly where the system would have been had the restructuring of the early 1990s not occurred. In other words, the march of the health bureaucracy will have regained its old stride and we will have walled off even more of our economy from beneficial market forces. Workers of the health care world, unite, you have everything to gain from the largesse to come - as the outsized pay increases of recent years show so clearly.

•Public Finance. The report calls for an annual increase of $6.5 billion in federal funding phased in over three years. A quick look at finance projections shows a federal surplus of $6.8 billion in 2005-06, conveniently just right for the desired spending increment. On the way there, however, annual ramp ups of $3.5 billion and $5 billion in pretend "one-time" spending are well beyond officially expected total surpluses.

So, no new money for anything else, no new tax cuts and no extra debt reduction. Mr. Romanow claims that there is no need for a tax increase, unlike the Kirby Senate committee that recommended the same increase in spending and responsibly also suggested a way to finance it.

This is unbalanced fiscal policy, to say the least, with all new surpluses ploughed into one area on the say-so of an 18-month expert on health care. What of defense, what of the innovation strategy, and, most importantly, what of the coming election campaign? What is the use of pork when you have none?

The second critique regarding public finances is that the amount of money spent should always be secondary to the quality and appropriateness of funds dispensed. There is a modicum of accountability introduced with the Romanow suggestions to monitor and direct health transfers to the provinces and better manage drug costs - but both of these suggestions will be done by bureaucratic overseers, the same central planning geniuses involved with directing current spending.

The best sort of accountability, by contrast, would occur bottom-up through providers satisfactorily providing timely care as needed. The only way to eliminate waiting lists, treat patients as valued clients, ensure adequate system investments and intelligently manage health services is to introduce market forces. That would entail a shift of funding from the ministries to patients, a separation of regulation from service provision in the government, and a deregulation of the current prohibition on alternative service delivery models. None of this is in the report and so the system will continue to waste a good part of the spending increase on higher salaries, inflation and inefficiently delivered service. We need more private providers and funds to improve health care services in this country, not a lecture on the evils of the private sector.

•Standard of living. Health is heading for 10 per cent of GDP. It is an industry marked by falling productivity (fewer procedures per doctor), higher unit costs or inflation (more nurses at higher pay per patient), little producer accountability (autonomous hospitals and specialists), no consumer rights, no market pricing, no true insurance principles, perverse incentives regarding delivery efficiency and resource allocation, and low prospects for generating exports or high value-added profitability that can be reinvested in the economy. Where is the Romanow report on these issues? Two words: status quo.