George W. Bush’s reputation among his friends, ever since college, has been that of a venturer, a risk-taker — not exactly a high-roller, but more of a gambler than, say, any other member of his family. The merit of that view is clearer now than ever before — not just the impending war in Iraq, but the long-term economic policy he is pursuing as well.

Never mind the widespread opposition in the Security Council of the United Nations. Consider the war aims themselves. All along, there has been a better, more sophisticated case to be made for war in Iraq than the simple “weapons of mass destruction” argument that the White House had been making. Gerald Seib, the excellent foreign affairs columnist of the Wall Street Journal, put it this way last week.

The goal is, by removing Saddam, to create a new strategic situation in the region. A friendlier government in Baghdad would change the geometry among Syria, Saudi Arabia and Iran. It might make it possible for the US to move aggressively to establish a Palestinian state, and perhaps even to pull its military out of Saudi. Not to worry about the French, who are held hostage by their large Muslim population. Many of the governments in the Middle East have quietly voiced their support, even if they can’t afford to be seen to cooperate too willingly.

Plans are in motion. It is impossible to know if they will succeed. Remember the vertigo during the first few days of the battle for Afghanistan? We will just have to wait and see how Bush’s attempt to “drain the swamp” of terrorism turns out. And in the event of a disaster, there is an election in just 18 months.

Risky? Absolutely. But such an overture to mainstream Islam — three times in the past twenty years Saddam has invaded his neighbors — does not seem to most Americans to be an unreasonable gambit under the circumstances.

Bush’s bigger gamble has to do with the issue of domestic economic stewardship. Here the outcome is far more opaque — all the more so since the real test won’t come until 2008.

There are two basic issues in US tax policy — the question of the size of government and the health insurance/pension problem. They are intricately related, naturally, but each is distinct. Bush has tackled the first and purposefully deferred the second, expecting that, as the insurance problem worsens, it will become easier to impose the changes that he favors.

The size-of-government issue has mainly to do with the legacy of the Clinton years.

Keep in mind that there really was a “Reagan Revolution” in the United States during the 1980s. It was equivalent in many ways to Franklin Roosevelt’s “New Deal” of nearly fifty years before — a decisive swing in the tiller of government to a new tack, attracting a broad and durable coalition of voters.

A more confident and assertive foreign policy, a new stringency against inflation, lower marginal tax rates, widespread deregulation (both governmental and corporate), stout resistance to the claims of interest groups (especially labor unions), a greater emphasis on trade, a bipartisan compromise to maintain the Social Security program — all these were presented to the young as a bold and coherent vision of the appropriate relationship of the state to the market.

The symbolic centerpiece of this restructuring was the 1986 Tax Simplification Act — an income tax with just two brackets, 15 and 28 percent, achieved through the elimination of virtually all tax shelters. The product of a surprising legislative compromise, it was a standard upon which all could agree.

Not for long. On the even of the First Gulf War in 1990, President George H. W. Bush agreed to raise the top bracket to 31 percent, in the name of war finance and deficit reduction. Because of this abandonment of his “read my lips — no new taxes” pledge, the Republican Party fractured, H. Ross Perot entered the presidential race, and Bush was defeated for re-election in 1992.

Then in 1993 Bill Clinton raised the top rate to 40 percent.

For whatever combination of reasons, a ten-year boom ensued. By the end of it, the Federal budget was in massive surplus — what his critics call the “Clinton bulge.”

During the 1990s, the federal share of GDP climbed steadily from its thirty-year average of around 17.5 percent of gross domestic product until it reached 19.2 percent in fiscal year 2000 in the standardized budget (that is, the budget scrubbed of cyclical influences and one-time special items).

In an $11 trillion economy, that 1.7 percent amounts to almost $200 billion in additional tax revenues, close to a tenth of the entire Federal budget — real money in anybody’s book.

(Under Ronald Reagan, the federal share fell from 19.4 percent in 1981 to as low as 16.9 percent, before settling back at around 17.5 percent by the time that he left office.)

It is this higher percent governmental claim on the nation’s resources that George W. Bush’s 2001 tax cuts were designed to roll back — from around 19.2 percent to the 17.5 percent level, where revenues were when Bill Clinton took office. Most of the relief was directed to those well-to-do citizens whose taxes were raised in the early 1990s.

The 10-year $725 billion tax cuts Bush proposed earlier this year as “stimulus” to a hesitant economy presumably would serve to trim the federal share somewhat further, though how much is not clear, especially since they seem to be in trouble in the Senate.

In a nutshell, this is the size-of-government issue. The existence of large deficits ise viewed largely as a hobbling device, associated with economist Milton Friedman, designed to maintain the pressure on government not to spend more than its share. “I would rather have a government spend one trillion with a deficit of half a trillion than have a government spend two trillion with no deficit,” he often says.

The tactic didn’t work when Ronald Reagan cut taxes and let government borrowing soar. Indeed, the politics of deficit reduction brought on Bill Clinton. But hope springs eternal in tax-cutters’ breasts.

It’s even possible that conservative economists one day will adopt the tactic of truth-telling instead of indirection. A compact among voters limiting tax revenue targets to some agreed-upon fraction of GDP does not seem a far-fetched dream, especially in an age of successful inflation targeting.

That he can return the government to its traditional size or even reduce it is the first gamble of George W. Bush. The second is more audacious. It has to do with the solvency of the two broad insurance programs that evolved in the industrial democracies during the 20th century. In America they are known as the Social Security and Medicare programs.

These are the so-called “entitlements” or “safety nets,” floors beneath which income levels and standards of care are not allowed to fall. These programs are expensive, and becoming more so as the large numbers of the Baby Boom generation approach retirement. And of course their growth can greatly skew comparisons of public spending over time such as the ones above — at least until the budget is “standardized” for demographic changes, too.

Many economists don’t like such safety nets because they think they lead people to work less hard or save too little or spend differently from how they might otherwise and thereby decrease overall economic efficiency. They advocate for the adjustment or abolition of such safety nets in favor of “giving people the freedom to choose for themselves.”

But as the Boomers come of age and begin to experience life’s vicissitudes more directly, the different possibilities will be much more thoroughly examined. The rising generation will be consulted, since it is their work effort that will be taxed — or not — to pay for promised benefits.

By choosing not to shore up the financial underpinnings of the Social Security system, and being slow to tackle health care reform, George Bush had made another bet — a bet that, by the time they begin to retire, the Boomers will regard the underfunding of the systems as faits accompli, and that they will embrace the alternatives devised for them by the Republicans.

If, on the other hand, voters decide that the insurance aspects of these programs outweigh the strictly economic costs that they impose, then Republican fiscal stewardship may come to be seen as having failed. George Bush will have retired by then, but his would-be successors will face a hard road. The tiller of government will be thrown over — again.

In fact, the times seem to call for something a gambler. You have only to look at Japan to see what happens to a nation that suffers a generational loss of nerve and tries to sit on a lead. There’s absolutely nothing flaky about George Bush’s economics. Like his war in Iraq, he is deliberately taking a risk.