The late AEI economist Herbert Stein often remarked that "trends that can't continue, won't." As the nation's fiscal imbalance continues to worsen, Mr. Stein's proverbial wisdom has been referenced often. The question is, how will the balance be restored? In his new book The New American Economy: The Failure of Reaganomics and a New Way Forward (Palgrave Macmillan, 2009), economist Bruce Bartlett declares that tax increases are inevitable in order to reel in the nation's rising deficit and to prevent the return of 1970s-era stagflation. The conservative policy of "starving the beast" by denying revenue to the government has not worked. Mr. Bartlett argues that conservatives should chart a "new way forward" for the American economy by seeking to restore balance with more efficient, if not smaller, taxes. He makes the case for the value-added tax as the most effective way to raise necessary revenues and a better alternative to raising marginal tax rates on income.

At this event, Mr. Bartlett will present an overview of his proposal. New York Times economics columnist David Leonhardt, AEI resident scholar Norman J. Ornstein, and AEI visiting scholar Bill Thomas will discuss Mr. Bartlett's recommendations. AEI's director of economic policy studies, Kevin A. Hassett, will moderate.