David Brooks and Rep. Paul Ryan of Wisconsin had a great debate at AEI today over the proper size and scope of the federal government. The debate originated with a WSJ op-ed that Ryan and AEI's president, Arthur Brooks, wrote in September. Brooks responded to their argument in one of his NYT columns. Then the two sides agreed to meet and discuss their differences in front of a public audience. The conversation was as civil, reasoned, and insightful as you'd expect.

I watched the debate online. Basically, the difference is this: Ryan and Arthur Brooks say that the Democratic party is moving America toward a cradle-to-grave welfare state, and voters face a stark choice between a return to traditional values of limited government and personal responsibility or a debt-laden, low-growth future of managed decline. David Brooks says the choice is not that stark; that Obama and the Democrats are not socialists but traditional American liberals; and that there is a long tradition in America of limited but energetic government that conservatives and Republicans ought to embrace.

There's a lot of overlap between the two positions. Both Brookses and Ryan believe, for example, in a safety net that protects those who cannot protect themselves. But David Brooks also believes that there are some places where government ought to be more interventionist and perhaps even more paternalistic—such as in social policy, where intervention at an early age is necessary to prevent the degradation or loss of human capital. (Read David Kirp's excellent National Affairs article on the black-white achievement gap for an example.)

One thing that struck me was that neither side really defined their terms. What kind of welfare state are we debating? David Brooks mentioned Hamilton, Lincoln, and TR. All three men used "big government" to intervene in the economy. But what sort of big government?

I think we need to distinguish between a government that finances long-term investment and a government that finances present consumption. Hamilton, the Whigs, Lincoln, and TR sought to improve American infrastructure and level the playing field so that young men of talent could overturn entrenched market incumbents. Growth was the result. Yet the American welfare state, as presently composed, is devoted almost entirely to consumption in the form of Social Security, Medicare, Medicaid, and interest on the debt. The money spent on education, R&D, and infrastructure is a pittance by comparison. The one place where we actually do massively invest in (global) public goods is defense. But of course that's where everyone wants to cut.

We need to deemphasize consumption and focus on investment. I think that Obama, in his heart, would like to do just that—as David Brooks pointed out, Obama's "New Foundation" speech, while disturbing in its rhetoric of a fundamental break from past decades of American history, was about an economy of investors rather than consumers.

But the president is also trapped, as he and his party seek to protect, and in some cases expand, the welfare state as it exists today. The problem is that consumption has crowded out all other parts of the budget, and is on its way to creating a massive fiscal crisis. Raising taxes and creating a new entitlement in the form of Obamacare is not the way to make things better. To have more money to spend on defense, highways, education, and the like, we will have to radically reshape the bedrock programs of Social Security and Medicare and reduce the debt through pro-growth tax reform. In other words, to get the sort of government David Brooks wants, we are going to have to use Paul Ryan's means.

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