1.  People are panicking for the wrong reasons.  The public retreat from the Republicans came before the Ryan budget dominated the political debate and the most recent Mediscare.  As Henry Olsen pointed out, the Republicans did quite badly in the Wisconsin judicial election that was won by the right-of-center David Prosser (the judicial election happened the same week that Ryan rolled out his budget, but it wasn't an issue in that election.).  Prosser only won because he did unusually well among African Americans (compared to Scott Walker in last November's election), and African American turnout was low for the election.  The fact that it was a formally nonpartisan election probably helped Prosser because he was less associated with the toxic Republican brand.  Republican candidates won't have that option in 2012, and Obama being on the ballot should boost the African American turnout.  The most ominous sign from Wisconsin and New York is the shrinking Republican margins among white voters.  Republicans won white voters by huge margins in 2010, but those margins have receded - and it isn't just Mediscare.  There are long-term problems of coalition formation here.

2.  Note to future Republican candidates: don't let the Democrats of the hook.  Elections need to be choices between different approaches, not referendums on the Republican approach.  Don't complain that the Democrats don't have a plan.  This is a case where nothing beats something.  The Democrats are the party that has already cut Medicare by hundreds of billions for current seniors.  The President has proposed a further cut of over a trillion dollars in Medicare to current seniors to be enforced by a bureaucrats.  And the deficit isn't sustainable even with those cuts  The Democrats are the party of centralized benefit cuts, middle-class tax increases, and fewer jobs.

3.  Having said all that, the Ryan budget really isn't good enough.  Here are Ross Douthat's reasons why.  Here are my (mostly second-hand) reasons. 

4.  There is a chance for the Republicans to have a really stupid internal debate about where we go from here.  One lousy argument will be to retreat to Newt Gingrich nonsense about cutting waste and promising a "national conversation" as a debt crisis comes ever closer.  Another (better, but still misguided) approach will be to turn the Ryan budget into some kind of Republican orthodoxy.  I want to see Republican politicians and candidates offer their own policies on entitlements and health care policy and those who do so should be welcomed if they pass two basic tests.  First, the policies should realistically address our fiscal problems.  Second, the policies should have some hope of competing for public support (this last is more subjective of course.)  Newt Gingrich's waste cutting strategy and Gary Johnson's proposal to immediately cut Medicare by over 40% and block grant the program each fail in a different way.

5.  Someone needs to tell Newt Gingrich that we are already having a national conversation on entitlements.  This is what such a conversation looks like.  This is, more or less, what such a conversation was always going to look like.  Plans are going to be articulated and compete in the political marketplace.  Conservatives should be open to constructive criticism of Ryan's plans, but should not despair.  The first step is the arduous and thankless task of public education.  I'm sure glad Paul Ryan is still out there fighting.  We need more Paul Ryans (with slightly different plans.)

6. Okay, maybe a little despair is in order.  I don't think that any of the current Republican presidential candidates are going to be much help in winning the public argument on entitlement reform.  I hope I'm wrong, but the biggest cause for Republican concern has little to do with the incompetence of the New York Republican Party.  But even if I'm right, politics won't stop in November 2012.  The Democrats didn't just start fighting for Obamacare in January of 2009.  It was a long march.  Good for them.  We should have equal persistence.  Or as Reihan Salam wrote:

The whole brouhaha is a reminder of the need for the right to think long-term. The health reform debate played out as it did because social policy scholars like Jacob Hacker thought deeply about the defeat of Clinton's Health Security proposal and they designed a new approach designed to survive the rough-and-tumble of the political process. To win these fights, policymakers need a half-a-loaf strategy, i.e., fallback options for when they run into resistance. The defeat of the public option was, for health policy advocates on the left, a relatively minor loss, as the likely trajectory of health costs in a tightly centralized system built around subsidizing coverage with a high actuarial value all but guarantees the need for aggressive cost containment measures in the future. Win now, or win later

7.  The alternative is for the American center-right to become like the Greek center-right and offer policies that nibble around the edges of the economy's problems and hope to have a share of power until the smash comes.  Our smash would end up looking different from Greece's for lots of reasons (this is probably an optimistic scenario), but the alternative to some kind of serious reformism is going to be some kind of ugly.

8.  Dave Weigel has the rundown on the role of Republican incompetence and infighting in losing NY-26.