Seems pretty obvious that there is no fiscally-conservative party. The GOP doesn't want to cut spending any more than the Dems do, even when they are in power, Even now, there's no one on the GOP willing to stick out their neck and say clearly, here's what I'd cut, by how much, and why. Show me one GOP legislator who has used either of these tools:
http://crfb.org/stabilizethedebt/ or http://www.nytimes.com/interactive/2010/11/13/weekinreview/deficits-graphic.html (here's my version)
either one lets you specify priorities and trim spending. They use actual numbers. Will we ever see a GOP legislator, even a Tea Party one, get specific with these? Never, and the reason is simple - the GOP talks a good game about the need for deficit reduction but in the end is just as afraid of the voters as the Dems are.
And you know what? that's ok. That's democracy, and the voters spoke, so we are basically forced to accept that we didn't do a good job of persuading our views. We need to continue that and accept that it's a long term process, not an overnight fix.
But in the meantime, conservatism needs to reduce its focus on fiscal issues and focus more on the social side of things. As Erick's post said, there are so many policies about values and social and moral issues that we should be embracing more strongly.
Look, the government will be spending the money. We need to make sure that it spends it wisely, and make a case for morality and values to guide it. That should be our focus, even as we lay the technology groundwork for persuasion in the next election cycle.
We only lose if we give up. The fiscal-cons always wanted to trow the social-cons under the bus, and look where that got us? Time for a reversal of priority.