The Paul Ryan pick as Republican vice-presidential nominee may offer numerous opportunities for Mitt Romney's campaign, but it also offers both an electoral and an economic trap: the risk of transforming this election into solely a referendum on various Medicare reforms. Some in the conservative movement may be hungry for a "choice" election on the future of government-financed medical spending, but this eagerness should not distract from needed economic reforms. Meanwhile, there is a risk that the election becomes mired in a cycle of Democratic assaults upon the Ryan budget and Republican outrage at these assaults. Such a dynamic might be good for blogger traffic, but it would likely damage the political prospects of Republicans and the economic prospects of Americans.
Medicare may be on an unsustainable path, and the growth rate of medical expenditures may eventually break the finances of the federal government. Debates about how to reform the federal financing of medical care are necessary and worth having, yet what is at issue is when we should have these debates and how much we should focus on such debates at the present moment. Barack Obama would very much like to fight over Medicare proposals; he would like to avoid any attention to his record over the past few years. The president would vastly prefer to distract from the failures of the present through conjuring fears about the future. There is no reason for Republicans to let him slide on his record. By allowing Obama to make Medicare reforms the centerpiece of this election, Republicans would be giving him a clean slate.
By sacrificing all other issues for an exclusive focus on Medicare and other entitlement reforms, Republicans would also be making a policy mistake. However much it may loom in the future, Medicare is not what imperils the economy right now. Businesses are not hiring not because Medicare might go insolvent a number of years down the road. If the economic trajectory of the past four years continues indefinitely into the future, almost no version of Medicare (including Paul Ryan's) will be affordable. If the point is to reform Medicare to make it sustainable (as Ryan allies claim), then we had best look at more pressing issues for the sustainability of Medicare and the future of the American economy as one of dynamic growth. Moreover, even Ryan's reforms, which many in the Beltway conservative establishment have rallied around, would do nothing to change entitlements for the next ten years at least. Ten years is a long time, and there need to be conservative alternatives for the medium term as well as the long term.
So Romney and his fellow Republicans should not let the focus slip too much from the theme of economic restoration and renewal. And I for one am doubtful that reducing the deficit or cutting spending alone will solve our economic problems. Many other structural risks are posed to the American economy. For instance, banking reform could be a key policy and political move for Romney. We still live in an era of too-big-to-fail. Many on the right have become increasingly aware of how TBTF endangers both economic growth and the freedom of the American economy. It seems very likely that the president's signature financial reform initiative, Dodd-Frank, has made it worse. Finance will need to be made a market again (rather than a government-backed syndicate) in order for the economy to take off.
Our immigration system and lack of immigration enforcement still place burdens upon the middle class---both native-born Americans and legal immigrants. Our trade policies often incentivize the intervention of foreign governments into the American economy, mocking rather than living up to the spirit of free trade and free enterprise. Our regulatory structures too often encourage deindustrialization and rent-seeking. Our tax policies are larded through with loopholes for interests connected to those in power. Debt and stagnating incomes have led to a troubled housing sector. A lack of a smart energy policy drains our growth. Disappointment and diminishing resources have been the story for too many Americans. Inner-city families still struggle with urban blight and decay. Our health-care system is in need of market reforms.
A host of challenges face our economy and our society---and not all these challenges can be met through the budget. Entitlement reform, if it is to be advanced, may work best as part of a broader menu of needed reforms. Denouncing the president's Mediscare tactics may rally the base, but it will not persuade the middle and it will not alone put the economy back on the path to prosperity. One of the key traits of conservatism is facing immediate crises first. Well, the breakdown of the economy is the immediate crisis. Restoring economic vitality will go a long way toward advancing the causes of free markets and free people that Romney and Ryan have publicly defended.
There is a bigger choice ahead than what will happen to Medicare: it is whether the United States will take a dark road of decline, despair, and decay, or whether it will return to what is best within itself and instead take the initially more difficult but ultimately more rewarding path of renewal, national recovery, and civic restoration.