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Case in point: mascara. The tube of mascara I happen to have in my cosmetics bag holds 1/4 ounce. That's about 1-1/2 teaspoons of liquid for those who can visualize it more easily that way.
Apparently the government knows or strongly suspects (or they wouldn't have made the rule) that there is some liquid that a terrorist could use to cause havoc, even in such a small amount. I promise you that there are places a person could hide a 1/4 oz. vial of something where it would not be found short of a body cavity search similar to that used for prison inmates.
Conclusion: the government has NO WAY of keeping whatever it is that it is worried about off of planes. As I see it, there are only two valid choices: (1) cancel all commercial flights because they are too dangerous or (2) spend a lot more money on investigation, and in the meantime warn people that if the terrorist makes it to the airport, chances are they are going to make it onto the plane, and that people should be aware of the activities of those around them.
Neither of these logical choices includes spending a lot of money on an activity that is nothing more than theater. They might as well have the director of the TSA come out and draw a protective magical circle around the plane with chalk and then have everyone chant "abracadabra" as the plane takes off. It would be just as effective, not to mention cheaper and less annoying for the passengers.
Personally, I'm willing to take my chances on flying in a plane with liquids even without a "magic circle."