Raising the Question of Systemic Change

Sustainable economic growth hinges partly on reduced spending and a cost-effective way to curb spiraling entitlement costs. Addressing these sensitive topics is difficult when election-year politicking offers vague and sweeping policy proposals. In a recent Op-Ed for The New York Times, columnist David Brooks offers a rare moment of candor, addressing the issues involved in fiscal and entitlement reform. Brooks deciphers the intentionally vague sound bites and policy proposals of the two entrenched camps to shed some light on what each party actually thinks. Brooks argues that Republicans believe that the 20^th-century model of government spending on entitlement programs is unsustainable and that it needs to be dramatically restructured. This stands in stark contrast to the view of Democrats, who believe the system just needs tweaks and not fundamental restructuring. Brooks concludes:

The GOP vision is of an entirely different magnitude: replace the tax code, replace the health-care system and transform entitlements. This is what this election is about: Is the 20^th century model obsolete, or does it just need rebalancing?

Brooks’s column shows why “comprehensive systemic change” should be added to the popular discourse on how to grow our way out of our economic malaise. Thinking in this macro sense would enable us to go beyond disagreement about spending cuts and entitlements. One way to broaden the discussion is to examine other issues through the lens of systematic change. One such issue might be government contract work and government benefits to private industry (read: subsidies). These issues are discussed by Brendan Miniter in the first chapter of “The 4% Solution” (Crown Business, release date: July 17). Miniter writes:

When profits are relatively easy to make in government contract work, there are fewer innovators willing to spend their time and their capital developing the next new innovation that could revolutionize an entire industry.

Miniter urges us to think about this issue in a broad context, rather than just focusing policy reforms on reducing the cost of minimum project bids to achieve only modest savings, which will not create real fiscal change. So cutting costs in government contract work should be discussed across the political spectrum. Sweeping reforms should not be the viewpoint of one party, but rather of anyone serious about addressing our ever-growing fiscal imbalances. Shifting the discussion and putting the idea of “comprehensive systemic change” on the table should be seen as a good thing.