Maggie's Farm

James Capretta makes the case that the real national economic crisis is the growth of middle class entitlements in his excellent essay, The New Middle Class Contract.

The danger as he sees it (and as I see it) is to risk suffocating the goose that lays the golden eggs which have (not really) paid for our existing middle-class entitlements.

One quote from his essay:

Some liberal politicians, including the president, have sought to use this moment of instability — when all past certainties seem suddenly in question — to advance their longstanding agenda and expand the role of the state in health care, energy, education, and other sectors, taking on new spending commitments and in effect exacerbating the dangers of the old middle-class contract. As Obama's chief of staff, Rahm Emanuel, said in November 2008: "You never want a serious crisis to go to waste."

But the shock of the economic crisis may also make Americans more open to serious entitlement reforms that Emanuel, President Obama, and many other Democrats have long resisted. The logic of the case for reform is much like that of the case for the recent emergency interventions: the need for a bold response to an enormous problem, aimed at regaining some equilibrium and allowing again for sustainable economic growth and prosperity. This is the time to explain to the public just how grave the prospects for our entitlement system — and therefore for our larger economy — really are, and to argue for a serious and sensible change of course.

The impulse to insulate the middle class from the cost consequences of their choices — an impulse that has defined our longstanding ­middle-class contract — has done great harm and stands to do far more. The remedy must be to redesign our entitlements so that the choices the middle class makes in terms of work, family, and health care will promote more productivity, efficiency, and wealth, rather than the shrinking of the labor force and the growth of government.

Done right, a new arrangement would both strengthen our fiscal outlook and improve the economic standing of American families.

Yes, he is an idealist. His whole essay at National Affairs.