Consider: young people would be taking care of old people even without social security
Every time you remove individual choice from making decisions about how to spend money and in its place substitute aggregate government spending, the efficiency of the system plummets. That's because the higher you move up the hierarchy, the less decision makers care about spending other peoples' money. It's the reason why markets tend to be efficient and government programs tend to be wasteful.
So you can't just say, "since citizens would spend money on x, we might as well create a government program that spends money on x".
The size of the budget is what's important. A government's ability to spend money is a government's power. Far from being a wash, transfer payments are government exercising its control.
I'm not saying it's a wash. I'm saying that the economic impact of each dollar of federal spending isn't the same, hence looking at simply the size of the budget isn't a good criterion. E.g. I'd much rather have a government with a $3.8 trillion budget, $2 trillion are transfer payments, then one with a $3 trillion budget, where only $500 billion are transfer payments.
For the last 40 years (leaving aside the spike caused by the response to the repression), federal expenditures as a percentage of GDP have been around 20% of GDP: http://stats.areppim.com/stats/stats_usxoutlaysxgdp.htm. During that period, discretionary spending as a percentage of GDP has fallen. That's not consistent with a narrative that the government has kept growing this whole time.
Every time you remove individual choice from making decisions about how to spend money and in its place substitute aggregate government spending, the efficiency of the system plummets. That's because the higher you move up the hierarchy, the less decision makers care about spending other peoples' money. It's the reason why markets tend to be efficient and government programs tend to be wasteful.
So you can't just say, "since citizens would spend money on x, we might as well create a government program that spends money on x".
The size of the budget is what's important. A government's ability to spend money is a government's power. Far from being a wash, transfer payments are government exercising its control.