perfidy

Johno, $4.50 x 280,000,000 = 1.26 billion dollars. That is a lot. The thing is, when you leave the money in the pockets of the people that earned it, instead of giving it to Ted Kennedy, they will use it for many different things. Some will buy beer and pizza. Some will collect stamps. Some will go out for cheap hookers. Others will save it, and invest it. Still other people will take the money that was invested, and give it to some yahoo with a too-clever idea for vacuum-powered hair cutting devices. That guy will hire people to manufacture and sell it. If some money is left over from beer and pizza, stamps or hookers, they will buy it. The economy has just grown. There is more wealth in the system. The new company will pay taxes. So will the formerly unemployed welfare mothers making the doohickeys, and the sleazeballs hawking them on infomercials at three in the morning. So revenue goes up. And as long as we maintain a sound fiscal policy, a low rate of inflation will be the result. This is a good thing. If some people aren't as rich as the new Vacuum Hair Cutter magnate, that's because they didn't go out and found their own company, which anybody with sufficient gumption can do. It's all about liberty. 

This kind of thinking is generally associated with the Chicago school - Hayek, Friedman, and that crowd. Historically, when taxes go down, revenue and the economy go up. Post WWII, post Kennedy, Reagan. When taxes went up in the sixties, by the seventies, the economy was a wreck. (Of course it is more complicated than that. But measures that limit the economy generally go hand in hand with higher taxes. So it evens out.) 

And the real problem with deficit spending is not the military - which is a legitimate function of government constitutionally, but entitlement programs that inexorably spiral upwards in cost. There is no conceivable tax increase that would pay for what's going to happen to Social Security and Medicare. If the economy grows fast enough, we'll have more money for warm fuzzy programs, and for things that kill little brown people. Liberals and Conservatives will live together. Mass hysteria. 

(Considering the vast expansion of the investor class, ironically one of Marx' dearest hope - that the proletariat would own the means of production, has kind of happened.)