Corporations would benefit, according to this point of view, if some of the surplus was used to pay down government debt. The people who held the debt, in the form of treasury securities, would then shift their repaid savings to corporate bonds and stocks. Companies, in turn, would invest this extra money in new equipment, in new technology, in skilled workers - the building blocks, in sum, of a more productive, robust economy. I am a knee-jerk liberal, so I prefer subsidizing child care. But I also value, even before such public spending, the building up of private savings through the repayment of the government's debt.
Conservative economists see a very different dynamic.
For them, entrepreneurs who are allowed to keep more of each dollar they earn become willing to invest their money in riskier ventures. The economy, as a result, grows more rapidly, and at some point, the growth is fast enough to generate rising tax revenues, even though tax rates have been cut. In this supply-side view, the stimulus to human activity from a tax cut outweighs the payoff that would accrue to society from the government's having spent the money on child care, health insurance, mass transit and other public services. For conservatives, public spending is justifiable only for services the private sector cannot provide, like the military. That is too narrow a view, the liberals say.