Ezra Klein share some dinner party ideas
I was at a dinner last night where everyone in the room had to name a few policies that they thought would increase economic growth in the coming decades. Increasing the number of visas we give to high-skill immigrants got the most votes, followed closely by loosening intellectual property laws. I favor both.
My big item, however, is eliminating the filibuster. Most people don’t think of this as a deficit-reduction measure, but they should. Deficit reduction is difficult.
. . . the harder we make this, the more likely both parties are to shy away from it. And if no one does anything, we’re hurtling toward a fiscal crisis — and those are really bad for growth.
I am not sure about loosening intellectual property laws. I lean towards favoring that policy but the effect on growth is not immediately apparent to me.
I would expand high skilled immigration to immigration period. Based on those two responses it seems like the guests are implicitly thinking of ways to increase per capita GDP or more likely consumption among high income folks. Its pretty clear that weaker intellectual property laws would result in vast near term increases in the quality of consumption regardless of the growth effects.
However, letting in a bunch of low skilled workers is nonetheless good for growth because more workers mean that more things are made. It’s also good for the medium term deficit since most of our costs are fixed costs in the short run.
Where I seriously depart is on the notion that we are headed for fiscal crisis. Are we? I am not confident of this. It is true that our current trends cannot be sustained. Yet, my best guess is that then they simply won’t be sustained.
I mean there is a significant freak out about the deficit now, when arguably the major problem facing the United States is that the deficit is too low. That makes me think that if a problem really started to materialize there would be major measures to stop it.
My guess is that natural response would be big tax hikes and freezes in reimbursement rates on medical services but this is just a guess. We are talking about a country and a culture possibly 30 to 40 years away.
The real question in my mind is thinking through ways to deal with exploding deficits if and when they come. What types of solutions do we want to be reaching for? What pitfalls might do we want to watch out for? In particular is it possible to get a handle on what to do about medicine?
Not just in a mechanical how do we structure payments kind of way but more deeply are we going to begin questioning the usefulness of the medical enterprise generally. This is not an easy question but unless there is a tech revolution in medicine it will become an important one moving forward.