Hope Springs Eternal

For many days I have been searching the news out of Washington, the media news cycles, and on the internet, for a scrap of optimistic news---perhaps that rationality was once again on the national menu. Hallelujah, there is an omen! On both the left and right, the "moderates" have become aware of the critical dangers confronting us if the extremist elements (in both parties) were to control the budgeting process. The moderates are speaking out, at some political risk, to rein in the most rabid budget cutters, to retain some small semblance of the Social Contract which gave us the world's highest middle class standard of living. They are also tackling the cost of the world's mightiest military establishment at a time when our financial resources are exhausted. To solve our financial problems will require a combination of reduced spending, and an increase in government revenue. Spending reductions are the most feasible in the present political climate, but in the long run they also reduce economic activity which reduces government revenue. Increased taxes yield increased revenue but theory claims they dampen economic activity and job creation. Who to tax? The middle class is already financially stressed and added taxes on them is unlikely to produce added revenue. Tax the rich flies in the face of the "trickle down" theory. Ah, there's the rub! We have had more than a decade testing the theory, and it has not worked as intended.The wealthy have become even more wealthy while the middle class has become impoverished. If we increase taxes on the wealthy it would not affect their consumption but the revenue could be applied to the national debt, reducing the annual interest burden and moderating the fall of the middle class. Sparing the wealthy did not turn them into engines of job creation. A combination of government and private capital can do that. So tax the wealthy, but offer tax incentives for private capital, related to the jobs they create. Anyone will chose the carrot over the stick.