I think the government's interference in the markets for housing, capital and labor are a much bigger problem than how much government consumes. Bubbles happen

I think the government's interference in the markets for housing, capital and labor are a much bigger problem than how much government consumes. Bubbles happen because borrowing money is subsidized. Unemployment is caused when interference with prices prevent supply and demand from equalizing. Government may waste capital, but I can point to many things that do. I think you can increase taxes if you free markets enough and the economy could still grow. You could GIVE everybody the downpayment for their first house and have a healthy housing market as long as you got rid of all the other subsidies and inducements and tax write-offs. Not proposing that, but you get the idea.