Tuesday, March 27, 2012

The Long Game

Good editorial in today's WSJ on Ryan and the Right:

They are also playing by the Beltway's big-government budget rules. The critics on the right are judging Mr. Ryan's budget according to Congressional Budget Office estimates that assume little or no economic benefit from better policy. Mr. Ryan's official budget proposal follows CBO scoring, but he is also trying to break out of that straitjacket.

He has also issued a second budget estimate based on evidence from the 1960s, 1980s and 2000s that tax reform and spending restraint will increase GDP by about 0.5 to one percentage point a year. This means the Ryan budget reduces the debt to GDP ratio to 50% in 10 years from 74.2% this year (and heading higher) and thus steers the U.S. away from the Greek fiscal rocks. Since when has the Club for Growth favored static Beltway revenue analysis?

Mr. Ryan is also proposing to cut spending to 19.8% of the economy in 2021 from 24.1% in 2011. That is hardly spendthrift. It will also be hard to pass given the resistance to change in Washington.

But what really matters on spending over the long term is entitlement reform, and on that score Mr. Ryan goes further than any Republican Congress or President since 1995. He understands that without converting Medicare into a market-based program with more choices for seniors, and without devolving Medicaid to the states and repealing ObamaCare, tax increases will soon become the political default option.

The entitlement state wasn't built in a year, and it can only be fixed with reforms that save money over time. Conservatives who really want to limit government should focus on major reform, not on hitting some unlikely balanced budget target in some future year.

The last paragraph is exactly right. The debate that conservatives need to be initiating is not about balancing the budget this year, next year, or 2018 and why any plan that does that sooner is automatically better. The debate needs to be about the proper size of government, the proper percentage of our economy that we want to dedicate to government spending, and the proper way to restructure entitlement programs so that they are sustainable in the long run.

Proponents of expansive government have been successfully playing the long game ever since the New Deal. Conservatives need to do the same thing otherwise any short term budget reforms that are implemented will simply be overturned down the road.