The government has very specific duties. Provide health care, education, law enforcement, maintenance of infrastructure, and basic defense. However, I would like to see a ton of laws go down the drain. The fewer laws, the fewer criminals, the less it costs to keep order.
Legalization of drugs would provide a TON of tax revenue at all levels of government (I would support a heavy sin tax on the hard drugs like coke and meth), create a lot of small business, and allow the FDA to put quality controls on drugs to prevent things like coke from being cut with borax or whatever. Also, DUI fines/penalties would be increased (let's say quadrupled). Hit a man in his wallet, and he'll behave.
Legalization of prostitution would be another tax source, with careful requirements for the protection of the workers. Regular STD tests paid for by the brothel, mandatory condom use, and protection for the workers in the event of a violent client. Pimping would be illegal.
The military would receive a very limited portion of the federal budget. Let's say 10%. That's still a lot of money, but would probably require them to cut stupid projects and prevent them from going on adventures like Iraq. I'm highly non-interventionist. I don't think isolationism is the best idea, either, but intervention without the country in question asking is adventuring we don't need.
Also, we're really, really doing it wrong when we're dealing with terrorists. Proven methods are being ignored and all we're doing is proving them right. I'm sure you're already aware of this.
Education would be returned to the hands of local school boards and parents, thus reducing or eliminating the need for a federal education department. Money goes to boards, of course, but federal money would go to states who would divy it out appropriately based on need. I'd like to see more school districts do it like CUSD does with community bonds, too. And no more teaching the the test. That is AWFUL, for the teacher and the students as it leaves little too or no time for anything outside the very basics of math, English, and perhaps a little science or history. If they didn't go to school here in California, our parents got a better education than we did.
Intellectual property has it's place but the current system is fucked up. Creative commons is a step in the right direction, but publishers' rights should be limited when it comes to keeping something under copyright. Heirs can request that something remain under their control, but only for two or three generations. None of this crap we saw with Amazon and 1984.
The government has almost no right to limit communication of any kind. If it's not exploitative or a state secret (of which there should be precious few), then it needs to keep its sticky fingers to itself. Also, transparency is of incredible importance. The Freedom of Information act should be amended to speed up the process it takes to get information to those who request it.
Health care would be, obviously, universal. Federal money goes to state health committees, which divide it between hospitals as needed. With private practices, they are paid from federal money and ALL records are put in a database so as to prevent records from getting lost. This insures that you don't have to switch doctors or worry about loosing benefits when you switch/loose your job. You pay something similar in terms of taxes that you would to a private insurer. You can also opt out if you would prefer a private insurer for whatever reason. Let's say I want to keep Blue Cross. I pay Blue Cross and not the feds except perhaps once a year in my federal taxes. That way, if I loose my job I can sign up right away. This is important for people who have serious medical issues or ones that require regular care (bipolarism, diabetes, etc.). Most people aren't going to require constant care however, so until you remove yourself from the program, the money you pay is going to be used for other people. When you sign up, you must remain in the program for a full year to prevent abuses.
If you can't work (like a late friend of mine) and you therefore don't pay much in taxes, you still get your benefits provided you keep treating your illness. If you stop, you get kicked off everything but the very, very basic plan (ie, you go back to the doctor six months from now, you can get back on that plan).
Preventative medical care is encouraged.
Bureaucrats take a doctor's advice into consideration when dealing with your medical coverage. I don't see why it has to work any different than a private insurer at all, actually, and perhaps we can improve their system. If nothing else, hire more people. More jobs, better economy.
I'm pro-union--it's my right to demand certain things from my employer, like safe environments, benefits, etc. if they want to keep me. Businesses can't be trusted to do the right thing because the right thing is the long run and they don't think in those terms. It's always now-now-now--we see that in the way they treat the environment and the way they do business; all businesses do it to varying degrees. Remember September 2008? The free market failed when we got rid of a specific regulation called the Glass-Steagall act. If they had behaved themselves in the absence of that act, we would not be in a downturn like this. They saw the removal as an opportunity to make money in the NOW and not worry about the later. Later always comes and when we don't watch what the hell they're doing, they drive us into the ground.
Also, business will no longer be treated like natural persons. They would go back to existing at the will of the people. Businesses do not breath, think, or have emotions. People do.
I am not a fan of the current model of capitalism we live under. Businesses should be just as controlled as government because they can do just as much damage to people as a nutty government. That said, the government only has the right to control their behavior in order to prevent harm. Other than that, have at.