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The Solution to the Country’s Debt and Deficit ProblemFor most people, the country’s national debt and annual deficit are not major concerns. However, for a substantial portion of the policy types who make, write, and talk about economic and budget policy, debt and deficits are really big deals. And, the fact that our budget deficit and debt are both large by historic standards, and growing rapidly, is an especially big deal.
The list of people in this category is lengthy. It starts with the Peter J. Peterson Foundation (which displays the debt in big numbers right on its home page) and the many groups funded by them. The most important is the Committee for a Responsible Federal Budget, which is virtually guaranteed prominent placement in stories on the budget by major news outlets.
The Washington Post (both its news and opinion sections) has a high standing in deficit hawk circles. House Speaker Nancy Pelosi and other members of the Democratic leadership have at least one foot in the deficit hawk camp. And, of course, Republicans are big deficit hawks when a Democrat is in the White House.
In order to make these deficit hawks happy, I have a proposal – we’ll call it the “Baker Budget Fix” – that can eliminate debts and deficits forever. It’s fun, simple, and can give us balanced budgets for all eternity.
The basic point is that the government can sell off all sorts of patent and copyright monopolies and collect massive amounts of revenue. Regular readers know that I am not a big fan of patents and copyrights, but since I’ve made little headway in getting these policies questioned in public debate, why not just embrace them? After all, since everyone who matters seems to be just fine with ever longer and stronger patent and copyright protection, let’s use them to raise a ton of money for the government and make the deficit hawks happy.
CEPR / September 27, 2019
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Peter Navarro's "Huge Victory" on International Postal Agreement Will Save U.S. 0.0025 Percent of GDPCEPR / September 26, 2019
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Γεωπολιτική της κρίσης στη Βενεζουέλα: Οι συντηρητικοί της Νότιας Αμερικής αντεπιτίθενταιAlexander Main / September 24, 2019
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Donald Trump’s Plan for Winning the China Trade War: LyingDean Baker / September 23, 2019
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Latin America and the Caribbean
Venezuela’s Oil Production Fell Precipitously After the Enactment of New US Sanctions in February 2019Kevin Cashman and Dan Beeton / September 23, 2019
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تحریم های آمریکا برای مرگ طراحی شده اندKevin Cashman and / September 18, 2019
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The Productivity to Paycheck Gap: 2019 UpdateDean Baker / September 18, 2019
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Historically Slow Productivity Growth Since 2005 Hampers Wages, ProfitsSeptember 17, 2019
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The Official U.S. Poverty Rate is Based on a Hopelessly Out-of-Date MetricShawn Fremstad / September 16, 2019
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Latin America and the Caribbean
Las reformas del FMI pueden empeorar la situación: el caso de EcuadorMark Weisbrot / September 16, 2019
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The Rollback of Worker Protections and the Culture of Long Hours Leave Our Economy More Vulnerable to the Next RecessionDean Baker / September 16, 2019
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The Crazy in Economic DataDean Baker / September 16, 2019
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Health Care Premiums and TaxesThere's an old joke about a lawyer who is questioning a doctor on an autopsy they had done on someone who was allegedly a murder victim.
The lawyer asked the doctor, "did you check whether the patient was breathing?"
The doctor answers "no."
The lawyer then asks "did you check whether the patient had a pulse?"
The doctor again answers "no."
The lawyer then asks, "so how did you know that the patient was dead," to which the doctor responds, "because his brains were sitting in a jar on my desk."
The lawyer then triumphantly asks, "so he could have still been alive?" To which the doctor responds, "I suppose he could have been practicing law somewhere."
Our doctor may want to amend their answer to allow for the possibility that the patient could be a political pundit for a leading news outlet.
Our pundit class have to decided to make a crusade out of forcing Senators Warren and Sanders into saying that their proposals for universal Medicare will require a tax increase. Both have repeatedly responded by saying that total costs for the vast majority of people will fall, since Medicare for All will lead to a large reduction in costs by all accounts, because it reduces waste in the health care system.
Our pundit class have insisted that this is some sort of dodge. While there may be no hope in addressing arguments to people who have their brains in a jar on a doctor's desk, there is a simple point that everyone else should understand.
CEPR / September 14, 2019
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Patents and Copyright: Protection Racket for IntellectualsLast week I was asked on Twitter why proposals for replacing patent monopoly financing of prescription drugs with direct public financing have gained so little traction. After all, this would mean that drugs would be cheap; no one would have to struggle with paying tens or hundreds of thousands of dollars for drugs that are needed for their health or to save their life. (This is discussed in chapter 5 of Rigged [it’s free].)
Public funding would also eliminate the incentive to misrepresent the safety and effectiveness of drugs in order to maximize sales at the patent monopoly price. Without patent monopolies, the drug companies would not have had the same incentive to push opioids, as well as many other drugs of questionable safety and effectiveness.
The idea of direct funding of biomedical research also should not seem strange to people. We currently spend close to $45 billion a year on research through the National Institutes of Health and other government agencies. The idea of doubling or tripling this funding to replace the roughly $70 billion of patent supported research now done by the pharmaceutical industry, should not appear outlandish, especially since the potential savings from free-market drugs would be close to $400 billion annually (1.9 percent of GDP).
So why is there so little interest in reforming the prescription drug industry along these lines? I can think of two plausible answers. The first is a self-serving one for the elites who dominate policy debates. They don’t like to have questions raised about the basic underpinnings of the distribution of income.
The second is perhaps a more simple proposition. Intellectuals have a hard time dealing with new ideas and paying for innovation outside of the patent system or creative work outside of the copyright system is a new idea that most intellectual types would rather not wrestle with.
CEPR / September 13, 2019
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Housing Continues to be the Major Factor Driving InflationSeptember 12, 2019
CEPR and / September 12, 2019
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Rising Health Insurance Costs Push Core CPI HigherSeptember 12, 2019 (Prices Byte)
Dean Baker / September 12, 2019
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WSJ Thinks Higher Social Security Taxes Are a Bigger Deal to Workers than Losing Ten Times as Much Money to Upward RedistributionCEPR / September 11, 2019