Whoever takes the oath of office as President of the United States in January of 2013 will inherit an economy facing multiple challenges:
Undoubtedly, still-escalating federal spending will have the government bumping up against the debt ceiling again. By then, total federal debt will be larger than our GDP.
Unemployment is likely to remain high.
The supply and reliability of our power-generating infrastructure will be stressed and at risk due to President Obama’s anti-energy policies.
Social Security and Medicare will still need to be reformed significantly to address long-term fiscal imbalances.
And the economy will encounter new headwinds as the landmines of tax increases with which Obama has salted the economic landscape are detonated. These include new taxes for Obamacare, the scheduled expiration of the Bush tax cuts, and the end of Obama’s temporary reduction in Social Security withholding.
Obama has shown no indication of modifying his policies or agenda. Presumably, any of the Republican candidates would favor change on these issues (although perhaps not on Social Security and Medicare), but would he or she actually be able to solve these problems, even if there were a veto-proof Republican Congress?
The big political question for election year 2012 is: How much change would Republicans want? Would they downsize government as much as Obama upsized it? Will Republicans nominate a safe, moderate candidate (think: Ford, Bush, and Dole)—a technocratic tinkerer who accepts the entrenched paradigm of Big Government, and seeks to manage Leviathan better than Democrats would? Or will they opt for an unabashed conservative, a major reformer with a radical vision for smaller government?
That question wasn’t even conceivable a year ago, but the tectonic plates in the American political landscape may be starting to shift. Whiffs of radical reform are in the air.
Herman Cain, who favors a three-step plan to replace the income tax with a national sales tax and the privatization of Social Security, has risen in the polls since his impressive victory in the Sept. 24 Florida straw poll.
On Sept. 27, Newt Gingrich unveiled his “21st Century Contract With America,” proposing to replace such venerable bureaucracies as the National Labor Relations Board and the Environmental Protection Agency. In doing so, Gingrich dared to challenge two of the most powerful Democratic special interest groups in America, environmentalists and labor unions (the strangest political bedfellows in our country, since hardcore greens would eliminate jobs in industry if they could).