The government's plan to deregulate universities is "a crime" and the move for co-payments for medical services is "absurd" in the view of visiting Nobel prize-winning economist Joseph Stiglitz.

Asked by Fairfax Media to nominate the two biggest mistakes the government could make that would take it down the American path of widening inequality and economic stagnation, Professor Stiglitz chose the budget changes to university fees and Medicare. Each would make Australia more like the US.

"Trying to pretend that universities are like private markets is absurd" : Nobel prize-winning economist Joseph Stiglitz. Credit:Andrew Taylor

"Countries that imitate the American model are kidding themselves," he said. "It seems that some people here would like to emulate the American model. I don't fully understand the logic."

In the lead-up to the budget Education Minister Christopher Pyne said Australia had much to learn about universities from overseas, "not least … from our friends in the United States".