The Brink Lindsey essay that everyone is talking about is here.
Allow me to hazard a few more specific suggestions about what a liberal-libertarian entente on economics might look like...
Shift taxes away from things we want more of and onto things we want less of. Specifically, cut taxes on savings and investment, cut payroll taxes on labor, and make up the shortfall with increased taxation of consumption. Go ahead, tax the rich, but don't do it when they're being productive. Tax them instead when they're splurging--by capping the deductibility of home-mortgage interest and tax incentives for purchasing health insurance. And tax everybody's energy consumption. All taxes impose costs on the economy, but at least energy taxes carry the silver lining of encouraging conservation--plus, because such taxes exert downward pressure on world oil prices, foreign oil monopolies would wind up getting stuck with part of the bill.
...We can have true social insurance while maintaining fiscal soundness and economic vibrancy: We can fund the Earned Income Tax Credit and other programs for the poor; we can fund unemployment insurance and other programs for people dislocated by capitalism's creative destruction; we can fund public pensions for the indigent elderly; we can fund public health care for the poor and those faced with catastrophic expenses. What we cannot do is continue to fund universal entitlement programs that slosh money from one section of the middle class (people of working age) to another (the elderly)--not when most Americans are fully capable of saving for their own retirement needs. Instead, we need to move from the current pay-as-you-go approach to a system in which private savings would provide primary funding for the costs of old age.
My inclination is to agree with Brink on all of his particulars, but disagree with him on the bottom line. In my own recent essay on entrepreneurship and education, I began by saying,
I have been losing interest in the contests between Democrats and Republicans in Washington. I am more anxious about the outcome of the struggle between innovators and incumbents in the field of education.
I admire Brink's intellectual prowess, but I think that trying to overcome the political power of the AARP and teachers' unions with "some kind of reconciliation between Hayek and Rawls" is like walking into a gunfight holding a fork and spoon.
And speaking of fights, there is the little matter of militant Islam. If you think that we need to be less aggressive and more accommodating to the "international community," then fusing with liberals may seem appealing. I come from a different place.