[s_wilwerding]

Moses, you need to read Capitalism and Freedom by Milton Friedman. It was written in the 50s, but it talks about the role of government in a free society.

In macroeconomics, there is a term called "deadweight loss", which is the 40% of tax money that you call wasted. For every dollar Tiger gets to keep (and subsequently spends), there is a multiplier effect, because the person Tiger gives the dollar to spends the same dollar, and that person spends the dollar, etc.. What you really find is that one more dollar in the economy actually adds something like 3 or 4 dollars, depending on the multiplier effect. So, 40% of that half a billion dollars that the government keeps is a deadweight loss, meaning that it has no multiplier effect, which means that government is in effect taking roughly one billion dollars out of circulation (40% * 500 million * 4).