David Brooks has a very interesting column in today's New York Times. An excerpt:
Supply-side economics had a good run, but continual tax cuts can no longer be the centerpiece of Republican economic policy. The demographics have changed. The U.S. is an aging society. We have made expensive promises to our seniors. We can’t keep those promises at the current tax levels, let alone at reduced ones. As David Frum writes in “Comeback,” his indispensable new book: “In the face of such a huge fiscal gap, the days of broad, across-the-board, middle-class tax cutting are over.”
The political situation has changed, too. Republicans used to appeal to the investor class with economic policies and the working class with values, crime and welfare policies. But that formula has broken down. The workers are walking away from the G.O.P., and the only way to win them back is by listening to their economic concerns.
Brooks goes on to describe how a number of conservative politicians and thinkers have begun formulating various new policies specifically designed to appeal to lower-class workers without sacrificing (or, at least, further sacrificing) free market principles. I don't believe that supply-side policies are being removed completely from the agenda (and I don't think that Brooks really means to assert that), but there seems little doubt that emphasis is shifting toward modernizing state services and away from enacting broad tax cuts.
Any one have any thoughts about how the GOP should modernize its economic policies without turning away from the principles of economic liberty?