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America finds itself in a moment of profound and complex governing challenges. A crushing recession and feeble recovery have shaken the foundations of our financial and economic systems. We are struggling with the exploding costs of health care and entitlement spending, and fiscal disaster looms as our society ages. American families are anxious about wage stagnation, barriers to social mobility, and the nation's competitiveness in an era of globalization. Meanwhile, our large governing institutions—most of them designed several decades ago—are showing signs of decay and calling out for serious reform.
National Affairs, a quarterly journal of essays on domestic policy and political economy, was launched in 2009 to help Americans think more clearly about these problems and to develop promising solutions. This book is a collection of some of the most timely and concrete policy proposals published in the journal's pages in its first three years, offering ideas for reforming our welfare state, tax system, financial regulations, monetary policy, education, state finances, and more. Each essay reflects the journal's deep concern for the future of American freedom and prosperity, as well as its conviction that in America's great strengths—especially our commitment to democratic capitalism, our ideals of liberty and equality under the law, and our roots in the longstanding traditions of the West—lie the resources needed to address today's problems.
Introduction ix
I America's Challenge
Beyond the Welfare State Yuval Levin 3
Keeping America's Edge Jim Manzi 21
II Reforming the Welfare State
How to Replace Obamacare James C. Capretta Robert E. Moffit 43
How to Cover Pre-existing Conditions James C. Capretta Tom Miller 62
How to Fix Medicare Avik Roy 79
How to Fix Medicaid John Hood 100
How to Fix Social Security Charles Blahous 116
How to Get Means Testing Right Andrew G. Biggs 129
III Tax Reform
How to Think about the Tax Code Donald B. Marron 147
How to Fix the Tax Code Robert Stein 162
IV Financial and Monetary Reform
How to Regulate Risk on Wall Street Oliver Hart Luigi Zingales 179
How to Regulate Bank Capital Charles W. Calomiris 194
How to Reform Monetary Policy Scott Sumner 211
V Education Reform
How to Modernize Our School System Chester E. Finn, Jr. 231
How to Think about School Choice Frederick M. Hess 247
VI Reforming State Finances
How to Address the State Fiscal Crisis John Hood 269
How to Dodge the Pension Disaster Josh Barro 290
How to Approach Public Sector Unions Daniel DiSalvo 308
Overview
America finds itself in a moment of profound and complex governing challenges. A crushing recession and feeble recovery have shaken the foundations of our financial and economic systems. We are struggling with the exploding costs of health care and entitlement spending, and fiscal disaster looms as our society ages. American families are anxious about wage stagnation, barriers to social mobility, and the nation's competitiveness in an era of globalization. Meanwhile, our large governing institutions—most of them ...