It is a well-accepted rule of economics that when you subsidize something you get more of it. Three decades ago, when it was thought that the nation had too few physicians, the federal government stepped in and started paying hospitals for each medical resident they trained.

Presto! It's 1997 and we have a doctor-glut according to some officials.

Observers point out:

• The U. S. Health Care Financing Administration (HCFA) currently pays New York City hospitals an average of $87,000 annually for each of its residents.

• HCFA will shell out more than $7 billion this year for doctor training.

• But with so many doctors around, it will now pay $400 million to 42 New York medical centers over six years to train 25 percent fewer doctors.

• By Washington's economic standards, the subsidies for training doctors and then not training them amount to a savings of $700 million a year.

Should we go over that one again, class?