Isn't it possible that the very power inherent in government is going to encourage people to seek it out, build it up so they can make deals with it and use it for their own benefit?

...as long as it is a source of profit there will be an incentive for power centers to co-opt it. Businesses will seek to form alliances with government and work to serve it, because it gives them a free and easy work-around to frustrate the checks and balances of the free market.

This goes without saying. Human society is always in a constant tension between an all-too-easy tyranny of the powerful few and small historical islands of individual liberty. The financial and economic centers of these societies have adapted well to both. The Founders realized that maintaining a limited government would require constant vigilance.

You say there should be no government, or as little as possible...

My position is "as little as possible." While I've read entertaining SF about successful anarchic high-tech societies, I have no illusions on this matter. Even Ayn Rand believed that government was necessary.

Perhaps the growth of government you lament has been a result of the growth and perfection of capitalism, not the other way around.

No. Capitalism is a specific philosophy based on specific principles, a consequence of those principles, not a primary. It doesn't simply mean "system under which money is accumulated." A mixed economy of the type you describe is not a free market in action. There was a scene in "Atlas Shrugged" where one of the many corrupt businessmen who were being subsidized by the government was jeering at a businessman who refused to be co-opted, and was going broke. "How can you say your ideas work? I'm making a lot more money than you are! Doesn't that make me a better capitalist?"

In many ways, the program of Libertarianism has one thing in common with that of Marxism. It is very insightful at finding out what's wrong, but totally incapable of coming up with solutions. And the very centers of power that have the resources to actually challenge big government are precisely the ones that profit excessively from it. If you dig deep enough into any crooked or bloated buraucratic state operation, you will always find entire industries feeding parasitically on it. They have no incentive to change anything, and they will fight like demons to prevent change. This is why when Republicans do take power, nothing really changes.

The right thing to do with the ring was to throw it into the volcano, but it was those who sought power that forged it and gave it life in the first place. This is why I think the Libertarian program will fail, TB. It just wouldn't be profitable to implement it.

We don't need to implement libertarianism. We just need to stop the constant drift toward totalitarian collectivism. If we can reverse direction a bit, that would be even better. I have no more idea how this can be done right now than you do. If even Reagan couldn't do it, who could? In the old days, people went elsewhere when things got oppressive, and started new societies from scratch. I had high hopes for space civilization in this regard when I was young. Never happened. Now, I've gone as far "west" as I can go without dropping into the Pacific. And ironically, where I am now is more collectivist than places further east. Where can we go when my kids need a license to give me grandchildren?

Fifty years ago we certainly did not have a libertarian society, but the government had far, far less power than it has now. The Federal budget, in constant dollars, was one fifth the size it is now. Yet somehow things still got done. We built interstate highways, airports, schools, universities, and great cities. We funded aircraft carriers, bombers, and the first nuclear submarines. There were twice as many people in the military. We had a decent middle class, managed to educate the people who put men on the Moon, and built the greatest technological nation on the planet.

We do not need the government to have the size and power it has now to succeed, and most of those who tell you otherwise belong to the class of people who have much to gain from the status quo. You know...Ringwraiths.

(apologies for slightly resorting your post)