With record debt and deficits, it's no surprize that there are a lot of people out there now talking about reducing the size of government, and reducing deficits. However, like almost everything, there's a right way, and a wrong way to do this.
Republicans
Republicans are big into consolidation. Fewer people means fewer paychecks, fewer roadblocks, etc.
Many want to create more taxing districts, so they can consolidate services across county lines. Sewer districts and ambulance districts already exist in Kentucky law. Now they want parks districts, jail districts, police dispatch districts, and so on.
Many also like the idea of Metro government. Fewer layers of government to buy off on a particular plan means that there's an opportunity to implement new plans, and consolidate overlapping county and city services.
Having direct experience with sewer districts, I can tell you that organizations providing services which cross county borders is a very bad plan. There's no direct accountability. Judge-Executives end up controlling these districts, and point the finger at the other JE's involved every time these entities abuse the public.
Also, as we have seen in Louisville and Lexington, Metro government only serves to increase the tax base for the large city in the county, while failing to deliver on the promises of increased services outside the "old city".
Democrats
Democrats generally want to reduce deficits by increasing taxes. They ignore the waste, fraud and abuse of the current system, giving it lip service only when they want to bring in moderates.
All the while, they continue to expand government. The claim is that by expanding services, and making them compulsory, they will make things cheaper through quantity and (what is basically) mass-production. We have seen this at both the state and national level.
However, we know that raising taxes beyond a certain threshold results in lower tax revenues and a slowing economy. There have been scientific studies that show that the best tax rate for growth and taxes paid to government is around 15% total taxation. Hidden taxes and automatic payroll deduction mask the effect of overbearing taxation to a certain extent, but that only goes so far.
We also know that there is not a single government entity which runs better than a private sector counterpart.
Libertarians
From our side, we have a good number of members who want to change the world overnight. Get rid of social security, welfare, reduce the military, eliminate major sections of government, etc., and significantly reduce taxation as well.
However, people cannot adjust to changes this quickly, and we know its harder to end a government program, than it is to start one. We've taken the hard-line for 37 years, and haven't accomplished much for it, in the grand scheme.
While it makes some of our more radical members cringe, we need to keep our platform moderate (and never forget our principles), focus on the easiest things to fix, and ease our vision into place, and take the hard-line only when new proposals for expanding government come along.
The LP has had a great number of out-of-the-box solutions to complex problems. Social Security, Welfare, Medicare and Medicaid, immigration, national debt, and military policy.
It's not going to solve problems overnight; there is no such thing as an overnight fix for these complex issues. But with a plan that phases out these programs reasonably, we may live to see the country start to go the correct direction, and our children may see liberty in their lifetimes.
Personal Viewpoint
I believe that there are a couple of core issues to fix first, before we'll ever have a chance at fixing the problems with government.
Representation is probably the most important issue. When the country was founded, the ratio of Representatives to people was 1:30,000 (3/5ths clause notwithstanding). During the Progressive Era, in the Early 20th Century, along with creating Income Tax, removing state representation, and creating the Federal Reserve, the US House also voted to cap itself at 435 members. At that time, the representation ratio was around 1:200,000. Today, that ratio is around 1:680,000. My proposed solution is to double the number of US Representatives (and cut their pay in half). This would put us at a 1:340,000 ratio. Then in another decade, do it again. This would bring the ratio to 1:170,000 people, with 1740 US Representatives. Do these changes aligned with post-census elections, and the only cost would be renovating the capital to handle the significant increase in the number of Representatives.
We should also strongly consider implementing Term Limits for the Legislative Branch, and possibly the Judicial Branch, as well. This would prevent "bought and paid for" Congressmen from being able to stay in office for too long. And I don't think the founders thought that a Supreme Court Justice should sit in that position for 40 or 50 years.