Government -- measured by its real cost -- has never been larger. The regulatory state thrives and its hidden costs grow apace. Future generations are faced with huge tax bills for compulsory charity in the form of Social Security, Medicare, and Medicaid. Why, why, why?
First, we have become locked into a cycle of dependency on government, which began in earnest in the 1930s. The government way of life has acquired powerful and vocal constituencies, which few politicians dare to offend.
Second, we think we can afford gargantuan government. Thanks in large part to three eras of rapid technological progress (in the early 1800s, the late 1800s, and the late 1900s), real per capita GDP has grown more than 30-fold since 1789. Thus most Americans don't know (or don't care) how much better off they would be if, for example, Social Security were privatized or the mountain of economic regulations were reduced to a molehill.
Third, the onset of the Cold War -- followed closely by the Korean War and then by the apparent threat of nuclear war -- led us to a state of permanent and costly mobilization. Our reluctance to demobilize -- and our willingness to use armed force in some parts of the world -- stems, in part, from increasing dependence on foreign trade as a source of our growing affluence.
Fourth, with greater affluence we have become worldlier and less wedded to traditional sources of moral authority, namely, family and church. The family has dwindled in size, split with greater frequency, and drifted apart geographically. The church -- with the notable exception of counter-cultural fundamentalism -- has become more secular and less prone to the teaching of behavioral absolutes. Family and church have been displaced, in large part, by an increasingly paternalistic government, one that compels charity through taxation, one that enforces "right" behavior (e.g., bestowing special treatment on "disadvantaged" classes of people, banning smoking in most public and many private places, dictating the design of our automobiles in the name of safety and environmentalism), and one that fosters the redress of grievances through legislatures and courts rather than directly or the good offices of friends, family, and clergy.
Like teen-age cultists, we have renounced our faith in voluntary (and relatively costless) institutions. We have become addicted, instead, to the adoration of the state, which compels our obeisance and demands a high price for the privilege.