Should the Bush tax cuts be allowed to expire?

[JDPriestly]

28. What do you mean by applying the revenue to reducing the deficit?

How would that be done?

I think I understand how the revenue could be used for productive government investment, say in infrastructure and services. And I understand why that would be a good use for the increased revenue.

But how would revenue be applied to reducing the deficit? Would the revenue simply be taken out of the economy? Would we buy back US bonds? What does that really mean?

Would using the increased revenue to pay down the debt somehow simply downsize the money in circulation and downsize our economy even more than it has been downsized.

Would the effect be inflationary or deflationary or not at all related to inflation and deflation.

I'm sorry to ask so many questions, but you seem to have clear ideas about this, so I would like to know how you would explain this.