I see that five former Democratic chairs of the Council of Economic Advisers warned of an impending debt crisis in a column in the Washington Post. They tell us that current and projected future levels of deficits and debts will soon send interest rates soaring, crashing the economy. While I am skeptical about the basic proposition for a number of reasons, perhaps most importantly Japan's persistently low interest and inflation rates in spite of a debt-to-GDP ratio that is two and a half times ours, but let me offer a solution: selling off patent monopolies.
We can sell off patent monopolies in all sorts of areas, auctioning off as many as are necessary to make our deficit hawks happy. For example, we can sell off a patent on the idea of turning left at a fork in the road. If people try to get around the patent by taking three rights, we can sell off the patent on turning right at the fork in the road. And of course, we can sell off a patent on turning around and going in the opposite direction to take care of these wise asses.
We can sell off patents on boiling water and making ice. We can make as long a list as we like, there are no shortage of items which we can turn into patent monopolies.
Is this horrible economic policy? Of course it is, but our deficit hawks never pay attention to the obligations we impose on future taxpayers by granting patent and copyright monopolies, they just look at the debt. So, if that s all they care about, let's solve the debt problem by issuing more patent and copyright monopolies and make many of our country's leading economists happy.
And, just to be clear, we are talking about enormous sums of money. In the case of prescription drugs alone, patent and related protections cost us around $370 billion a year. This is almost 2.0 percent of GDP or more than twice the burden of interest service on the debt, net of money refunded by the Fed. (This is discussed in my [free] book Rigged: How Globalization and the Rules of the Modern Economy Were Structured to Make the Rich Richer.)
We could clearly raise enough money by selling off various patent and copyright monopolies to get our debt down to whatever size is needed to make our economists happy. It's stupid policy, but as the old saying goes, economists are not very good at economics.