I think personally the best investment use of the surplus is to have the state invest it in things like infrastructure, college tuition for students. Reconstruction of aging cities. The internet ....
Also while we are at it we could improve AFDC/TANF perhaps via a Guaranteed income which would be easier to adminster. It wouldn't be hard to spend 70 billion dollars.
The only tax cut I personally support would be to raise the minimal level at which one pays taxes at all. This would be much more progressive. However, I cannot see it leading to useful social investment because the poor will simply spend all they receive on the open market.
If the government wanted to favor "free" enterprise, the state could hire venture capitalists and fund IPO's absorbing the loss of unprofitable companies and selling profitable companies on the open market. Buying stock directly is a near total waste of money from the point of view of investing in the society and has nothing to do with real investment.
-- Michael Cohen mike at cns.bu.edu Work: 677 Beacon, Street, Rm313 Boston, Mass 02115 Home: 25 Stearns Rd, #3 Brookline, Mass 02146 Tel-Work: 617-353-9484 Tel-Home:617-734-8828 Tel-FAX:617-353-7755