You have to have a government to provide you with legal order, with stability, enforcement of property rights, enforcement of contracts, definition of rules and regulations - the rules of the game, so to speak - and to provide certain shared goods and services, public services. Several people have tried to estimate this and they come out with figures like government spending at 15% of GDP. In the modern world it has gone to 40% or above. So we are way beyond the optimal, and that is easier to say than what the optimum is.

You can get a coalition of senators from particular states in America, for example, who want to construct highways or dams or ports which may well be very inefficient. The taxes would be paid by the people over the whole country, but the benefits would go to the few people in those particular locations. This type of spending is a rather gross waste of resources that worsened over the years as the government has been allowed to do more particularized things.

How would the US be different today if people coming off the boat were greeted with a welfare check instead of a shovel?

People share a universal behavioural trait: if there are profits to be made, the effort to get that money will attract investment. This is true in the private sector, the market sector, as well as the public sector.

Clearly, I am not an anarchist. Philosophically, I might be, but I think in practical terms.

If politicians get money to spend and don't have to be responsible for taxation, then of course that will bias their attitude toward more spending as opposed to cutting back on spending.

Politicians and bureaucrats are no different from the rest of us. They will maximize their incentives just like everybody else.