I wonder where the theory that government spending is simply free actually comes from, that somehow when the government spends money (or enacts regulation or taxes, same thing) that the cost is somehow magically not that everybody has to work more and/or harder to achieve those things.

But it's sure becoming a popular theory.

Also: I think what you're describing might be the broken window fallacy: http://www.investopedia.com/ask/answers/08/broken-window-fal...