It's precisely that kind of thinking which has brought us to where we are today: in the grip of the regulatory-welfare state, which has made us immensely less prosperous than we could be. Free-market capitalism, which is how individuals cooperatively make wise and fruitful decisions -- when they are allowed to do so -- has been brought to heel by legislators, executives, judges, and regulators.
A central rationale for the regulatory-welfare state, of course, is the notion that government should do things people can't be "trusted" to do for themselves. There is the paternalistic assumption that someone else knows better than you how you should run your life. Paternalists are blind to the opportunity cost of paternalism, which is that when someone else makes your decisions for you, you are less able and less likely to make good decisions for yourself.
The paternalistic assumption, in other words, becomes a self-fulfilling prophecy. When government makes certain decisions for you (e.g., by providing "free" education and a sort of retirement program) and then charges you for the privilege, you are in a double bind. You are herded toward or forced into certain government programs, which may fall far short of meeting your needs. But because of the taxes and fees you pay to support those government programs, you are left with less money. Thus you may be unable to afford the better alternatives provided by markets -- where markets are allowed to provide alternatives, at all.
Paternalism on the part of the central government supposedly is curbed by the enumeration of Congress's powers in the U.S. Constitution, which enumeration has long since become an irrelevancy. In any event, when it comes to paternalism, State and local governments are always ready to pick up any slack left by the central government. The end of Lochner-era substantive due process (defended quite nicely, here) effectively unshackled State and local governments, which can now justify almost anything as a "compelling governmental interest." And, if they can't, the U.S. Supreme Court can continue to manufacture other excuses for paternalism, as majorities of its members did this year in Raich and Kelo.
So, where does it all end? Unless the U.S. Supreme Court is turned around fairly quickly, I think it ends in the continued expansion of state control of what should be private conduct; for example:
- Laws against certain "hateful" forms of expression.
- Detailed regulation of Internet content, under the rubric of McCain-Feingold and the Commerce Clause.
- More and more bans on the use of tobacco in so-called public places, and even in private clubs and homes.
- Further reliance on regulation rather than property rights and free markets to control products and activities that might affect the environment.
- Further interference with the actions of institutions that are private and voluntary (e.g., a holding that the Catholic Church's impending ban on the ordination of gay priests violates "equal protection").
- More government interventions that undermine the shreds of our barely civil and self-regulating society (e.g., approval of involuntary euthanasia, requiring employers to put "partners" on a par with heterosexual spouses).
- The creation of ever more massive bureaucracies to deal with "problems" that the central government (at least) shouldn't be involved in (e.g., the creation of a "disaster czar").