I recommend reading Peter Suderman’s entire post on the relationship between libertarianism and what I’ve been calling “reform conservatism,” but the ending, especially, is very perceptive about the state of play on the American right today:

… part of the reason why conservative reformers of various stripes have gotten so much attention recently—eventually, something will have to fill the [current Republican policy] void. The agenda Douthat outlines is perhaps one possibility, and simply because it’s a basically coherent policy outlook might even be preferable in a lot of ways to the sort of short-term thinking that grips the GOP right now. But although it has a number of high profile supporters, so far it doesn’t seem to be having much success in the actual halls of power. Indeed, if there is an upstart reform movement in the Republican party that actually seems to be gaining traction at the moment, it’s the one that draws more from the libertarian side of the right than from Douthat’s brand of lightly technocratic soft-social conservatism. Part of the reason the Rand Pauls of the world have had some success recently is that there’s space for an anti-establishment faction within the Republican party, and a growing frustration with the arrogance and ineffectiveness of the old guard. But that faction has also—though not always consistently—drawn from two important, and related, libertarian insights: that government, especially large and complex government, is not a very effective tool for doing lots of things, and that, as a result, it’s not a terribly useful tool for achieving big-picture social goals. I’m tempted to say that it embraces a politics of difference, but that probably goes a little too far. Instead, it embraces a politics of privateness, one that assumes, as a given, that the public realm, and public policy, can only accomplish so much, and that they should be limited accordingly. It’s another, still-evolving brand of conservative reformism, one that also says it cares—not by what it tries to do for you (or to you), but by what it promises it won’t.

I think this is right. To the extent that there’s a Big Idea for where the G.O.P. should go from here that has any real traction within the party (as opposed to among right-of-center pundits) and that doesn’t just reflect the self-interest of the G.O.P.’s big donors, it’s probably what Ben Domenech has termed “populist libertarianism” — a strain of thought that moves from the standard grassroots conservative view of Washington as an inherently corrupt realm of special interests and self-dealing elites to a broader skepticism of “bigness” in all its forms (corporate as well as governmental), that regards the Bush era as an object lesson in everything that can go wrong (at home and abroad) when conservatives set aside this skepticism, and that sees the cause of limited government as a means not only to safeguarding liberty, but to unwinding webs of privilege and rent-seeking and enabling true equality of opportunity as well.

This is a Tea Party idea from 2010, in a sense, but it’s been given more heft by figures like Senator Paul and by potential 2016 contenders like Bobby Jindal, and its imprint is visible across a range of policy debates: The return of right-wing civil libertarianism and the re-emergence of an anti-interventionist spirit on the right, the sympathy among some grassroots conservatives for proposals like the Brown-Vitter banking overhaul, the (pre-existing but expanding) conservative interest in prison and sentencing reform, the Congressional G.O.P.’s willingness (and eagerness, in some quarters) to accept defense spending cuts, the federalist turn on issues like gay marriage and marijuana. From the design of the sequester to the emerging design of Dave Camp’s tax reform, Republicans are plainly more willing to take on right-leaning interest groups (defense contractors, Wall Street) than they were a few years ago. And since the 2012 election, at least in some quarters, they’ve also become more likely to frame their arguments for limited government, not as briefs against the menace of socialism, but as defenses of the little guy — or the small organic farmer, to lift from of the more arresting passages from Paul’s recent Reagan library speech.

As the foregoing probably suggests, I see a lot to like about this populist libertarianism, and some of its impulses and tendencies (on pot and gay marriage, in particular) have a clear political wisdom even if I don’t necessarily share them. I’ve written favorably about Rand Paul in the past, and I expect to do so again: He’s exactly the kind of principled political entrepreneur that moribund parties need. And a G.O.P. remade along libertarian-populist lines — more anti-interventionist abroad, suspicious of big government and big business at home — would be a much more interesting party, and in certain ways a more constructive force in American politics, than the G.O.P. that Mitt Romney led down to defeat last fall.

But could it win a presidential election? And would it deserve to? Right now I think the answers are no and no, because its broader economic agenda — to the extent that it exists — would be both politically untenable and mistaken on the merits. Consider, for instance, Senator Paul’s budget blueprint, which offers the following five big planks:

1) A balanced budget amendment, requiring deeper cuts to discretionary spending than Paul Ryan’s budget contemplates.

2) A flat tax.

3) The repeal of Obamacare, without any sort of alternative reform on the horizon.

4) An end to the Federal Reserve’s (supposedly) inflationary policies.

5) Entitlement reform.

To be clear, I’m not saying this is the populist libertarian agenda, or associating it with Suderman or Domenech, both of whom I suspect would have some disagreements with it. But right now, it is an agenda that’s backed, in outline at least, by many of the G.O.P. politicians and activists who fit the category they describe. And as a blueprint for policy reform, it’s just not sufficiently responsive to the actual problems facing most Americans today.

Item 4 is straightforwardly wrongheaded: A recipe for slower growth, shading into stagnation, at a time when inflation is the least of the West’s economic problems. Items 1 and 2 are somewhat more defensible in theory — there are versions of a flat tax that would be preferable to our current code, and versions of a balanced budget amendment that might have a positive impact on how Washington does business — and I’m very much in favor of Item 5. But put the three together along the lines that many Republicans in this camp tend to envision, and add the repeal-without-replacement of Obamacare as well, and you have a reform of the welfare state that would dramatically reduce the tax burden for the wealthiest Americans while dramatically stripping down benefits and tax breaks for the poor and working class — and which would do all this, crucially, after a long era in which the rich have already been doing just fine (to put it mildly), while wages have grown more slowly for the middle class, the employer-based health insurance system has begun to unravel, and mobility from the bottom has probably weakened.

Would a majority of Americans vote for this combination? I doubt it. Should a majority of Americans vote for it? No, I don’t think they should. Principle matters, but context matters too, and conservatives simply cannot make economic policy successfully (or credibly cast themselves as a populist party on these issues) if they ignore the actual performance of the American economy over the last generation, and if they refuse to see that distributional issues as well as arguments from efficiency and liberty have to play a role in the way that we reform our tax code and our welfare state.

It is not a surrender to big government to recognize that cutting the top tax rate was a better idea in Reagan’s era than in ours, or that making the tax code more regressive is a counterproductive response to recent trends in working class life, or that some federal programs are better targets for spending cuts and caps than others. It’s an accommodation to reality — and one that libertarian populism, for all its promise as answer to the G.O.P’s malaise, has yet to adequately make.