I expect the Democrats to dominate this election (and probably the next), the Tea Party to slowly shrink, the caucus of Republican pragmatists to grow, until one day the GOP credibly offers to take over and improve stewardship of what the innovators have accomplished, and, with that desirable "pause on the last movement," the cycle to go forward as before.
Warsh lives in Boston. On Friday, I had a conversation with a Republican hill staffer who believes that the "fiscal cliff" will be avoided because the Democrats will lose so badly that their members in the lame duck Congress will go meekly along with Republican proposals.
At least one of these folks is living in a bubble.
for the next three decades it will confront the reality that major structural changes in the economy will compel an increase in the public sector's fraction of the total economy unless there is a substantial scaling down in the functions that the federal government has long performed. How government can best prepare for the pressures that will come, and how greater revenues can be mobilised without damaging the economy, are the great economic questions for the next generation.
Progressives believe that they are and always have been on the right side of history. They embody a sort of Hegelian world spirit of moral wisdom, and their opponents can stand in the way only temporarily. This world spirit today is calling for green energy, government provision of health care, and higher taxes, among other things. In the past, it called for abolition of slavery, women's equality, civil rights, and Social Security. (It also called for Prohibition, eugenics, and wage-price controls, but we need not dwell on those experiments.)
What if we have reached a point where the scale and scope of government have become absurdly large? What you would observe is a growing gap between the theories used to justify government expansion and its practical impact. You would observe the cost of education and health care rising, without commensurate benefits. You would observe stimulus programs that increase employment according to computer models but not in reality. You would observe crony capitalism. You would observe budgets distorted by public-sector unions. You would observe fraudulent accounting that shifts costs for pensions onto future generations.
The progressives may or may not be the ones living in a political bubble. But in their view of an ever-expanding central government as an instrument of the world-historical moral spirit, what if they are mistaken?