I generally support smaller government, but I don't believe that the issue is so black and white. Like most things in life, there's a good middle ground that needs to be met in order for society to function optimally.
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What it comes down to for me, isn't practical issues. It's a moral issue. What we "need" as a society is irrelevant. It's immoral for some people to rule others. Incidentally, I do believe society would function better with zero government, but that's a much longer discussion.