I find it troubling that the gov't is 30% of GDP. Dropping it by 40% would make it 18% (if I did the math right). I agree that that would be BAD BAD BAD all at once (I think some of it would be made up by increased private sector spending on things the gov't currently spends on, I doubt it would make up the difference).
The trouble is, simply shifting a service to the private sector does not necessarily save the government money. If the private sector can do it more efficiently then yes, there is a savings. But the efficiency has to more than make up for the need to produce a profit. If government workers build a road...or process tax returns...they do so for their wages+benefits+overhead. If you privatize that work the cost is wages+benefits+overhead+G&A+profit. If the government pays a private company to build the road then it probably does not save much. (For road construction that is pretty much how it is done now.)
And in most cases the private company is just hiring the very same government workers. So, somehow you've got to make up the G&A+profit through increased efficiency. It's nice to criticize government workers and say the private sector is more efficient. But the trouble is that it is largely a myth. In some cases a private company might have better technology or whatever that improves productivity but generally, the same technology is available to the government. These days.
So the trouble is that we would need to actually eliminate services to see any real savings. Personally I would not mind seeing some things go. The TSA is an enormous waste of money that does absolutely nothing to increase air security. That agency alone accounts for a substantial part of the increased spending in the last decade. We could save hundreds of billions of dollars if we cut way back on the military - keep us string but don't try to be the world's police force...NASA could stand some serious cuts at a time when we are in serious shape...
But these are all pet projects. Even the most vocal cutters always say "non security" cuts. But the truly big piles of money are in security. If we really want to have an impact we have to be prepared to live with less security. That's the bottom line.
Really, which services currently provided by government do you think should be eliminated? Privatizing them doesn't work. We'd need to eliminate them...
My guess is that most people could only come up with a very short list that would save
very little money. I suspect that if we had a vote, most people, though philosophically against taxes, would rather raise their taxes a little than significantly eliminate government services. Until we get rid of the sacred cows and the dogma we will get nowhere.