http://www.usgovernmentspending.com/year2009_US.html
Reducing class sizes from 25 to 15 would require 66% more teachers, lets guestimate that the cost of education would rise by 40% [1]. That's $340B for fairly small improvements in educational outcomes (0.04-0.12 standard deviations, according to stats posted elsewhere in this thread).
[1] Not all costs would scale upward with teacher salaries. We could sometimes repurpose 2 30 student classrooms into 4 15 student classrooms, and some administrative costs would scale with # of students.
My response was solely to the quoted number of $70 billion or so. $80 billion is not a lot. It appears the number quoted was in 1984 dollars or something like that. Even then it still isn't a lot given that the defense budget then was around $300 billion.
I prefer spending money on education, health, peaceful purposes but not everyone agrees. The point I made though, still stands. It's a not a lot of money and it isn't as if we couldn't do it.
Also, decreasing the class size to 15 students wouldn't get you very much improvement over current class sizes. It's only for every incremental decrease below 15 that you start to see meaningful improvement.
[...]
The immense costs make classes smaller than 15 utterly out of the question. In 1986, for example, a reduction of the national average for regularly convened classes from 24 to 23 pupils would have required almost 73,000 more teachers and 5 billion additional dollars, not counting the expenses of building more classrooms. Reducing the average class to 20 students would require over 335,000 more teachers at an added $22.8 billion. At 15 students, 1 million extra classroom teachers would be needed and added costs close to $69 billion."
[1] Riordan notes that there were some problems with this study, but that despite these problems later research has validated the original curve.
source: Equality And Achievement by Cornelius Riordan, p. 164