Last week at the Cato Institute, I debated Michael Tanner and former Congressman Dick Armey, two stalwart libertarians. The occasion was the release of Tanner’s book Leviathan on the Right, one of the better distillations of the argument that George W. Bush has frittered away Reagan’s legacy, increased the size and scope of government, and betrayed conservative principles.

But Tanner’s argument is not persuasive. For one, the often-shrill complaints of a few years ago about runaway federal spending now seem overwrought. To everyone’s surprise, the size of the deficit has fallen dramatically over the past two years. This year the deficit will be 1.6 percent of the economy–a level lower than in 18 of the past 25 years. The federal budget is projected to be in surplus by 2012.

But the real flaw of the anti-“big-government conservative” argument is that the adherence to libertarian orthodoxy often stands in the way of long-sought conservative and free-market goals. A recent development in New Orleans’s public school system makes the case vividly. Many conservatives castigated President Bush when he approved billions in post-Katrina relief for New Orleans. No doubt they were right when they predicted that much of it would be wasted, if not pilfered, by dishonest bureaucrats.

Yet the funds have also made possible one of the most interesting experiments in American education. Prior to Katrina, the Orleans Parish School Board was among the worst in the country. Barely any of its 8th-graders were performing at an adequate level. Post-Katrina, with federal money to spread around, the school board has been disbanded. In its place is a new organization that has been approving a wide range of competitive charter schools run by entrepreneurs and dedicated education leaders. A recent article in The Atlantic described it as “the most market-driven system in the United States.”

So the long list of conservatives and libertarians who have assaulted the Bush Administration over reckless spending on New Orleans have to make up their minds. Either they are intractably against big-government spending, or they are in favor of the most successful effort to undo the teachers’ unions and create a competitive system of public schools. But they can’t be on both sides.