For a century, liberals have been chasing the same organizing idea: to perfect the welfare state—the soaringly aspirational, deeply flawed apparatus of Social Security, public health insurance, and progressive taxation designed to guarantee a secure middle class—and to extend its protections to every American. A year ago, after Obama’s health-care reforms became law, that project looked closer to completion. Now we are debating the terms of its erosion—with Republican proposals to cut the benefits of Medicare and Medicaid, conservative efforts to repeal protections for labor unions, and an emerging Washington consensus that the costs of a broad welfare state may be beyond what Americans will willingly pay. The White House meeting this past December [with Paul Krugman and other left-of-center economists], viewed in retrospect, seemed to mark the end of the expansive first part of Obama’s administration and the beginning of an austere second phase. Krugman, departing, found himself left in the position that every purist fears, holding blueprints for impossible buildings.
“I think what people like Paul Ryan are trying to do is set us on a glide path to a much harsher society,” Krugman now says. “A country in which, step by step, more and more people are cast out into a situation of not having health insurance and poverty, and so we slide back to a Victorian notion that life is full of evils and that’s too bad but that’s the way that God made the world. That large numbers of the poor, large numbers of the elderly just live in dire poverty and don’t have health care because life is tough.” For two years, Krugman has been arguing that this trajectory might have been averted if only Obama had been a little less deferential, a little more demanding, a little more alarmed. And so Krugman has given the debate on the left its shape: whether the president could have mounted a more effective defense of the welfare state, and whether liberalism’s tragic flaw is Obama’s instinct for conciliation or his leading critic’s naïveté.