I saw this chart at Mark Perry's Carpe Diem blog and thought back to your listeria letter of a few days ago.
I think there has to be a cop, but the cop doesn't have to be everywhere nor inspecting at all times. We see this every day in many aspects of our life. So maybe $1 billion is enough. But also, maybe $1 billion is enough because the players in the space know they can get caught and fined even if the police aren't around constantly AND they know if they mess up they will face an even stiffer penalty from their customers AND most of the men and women who run these business are decent people just like you and me and they do their best to to do the right thing. What we really want the FDA, or any police force, to guard against are the criminal and the incompetent. Personally, without any supporting evidence, I believe the incompetent are much more prevalent than the criminal.
I don't think a large and ever-growing police state is necessary to keep the public safe, and as we've seen with the War on Drugs, the War on Poverty, the War on Crime, and the War on Terrorism, the police state can move from protecting the public to making war on the public.