How to slash the state: 14 ways to dismantle a monstrous government, one program at a time.

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LIKE SEQUELS TO Saw, the government just keeps coming, growing larger, more expensive, and more appalling each year. In times of economic distress, even at the increasing risk of default, the size, scope, and cost of federal, state, and local governments continue to balloon, swallowing everything in their path. For 10 solid years, and especially since September 2008, spending has boomed, the Federal Register has exploded, and Congress altered American life at an accelerating pace.

Yet loud critics of big government--especially but not only Republican politicians--are often reduced to an awkward stammer when put on the spot by the all-important question, "So what would you cut?" Well, stammer no more.

Consider the following a Halloween-themed cheat sheet for explaining who, what, where, when, and why whole swaths of government need to be cut or euthanized outright, so that taxpayer money is spent more productively, the remaining government services perform better, and the United States can finally begin its long slow climb toward solvency.

We've asked analysts from the nation's capital and around the world to offer tips and tricks for fighting off the cold, cold monster that is the state. The suggestions below are intended not as a last word but as a starting point: As in any good slasher movie, the savvy viewer will soon see potential victims everywhere.

Overhaul Medicaid

Imagine a government-run health care program that limits medical access for millions of patients, is racked by uncontrollably rising costs, and in many instances produces health outcomes demonstrably worse than having no insurance at all. The program exists, and it's called Medicaid.

Created to provide aid to the country's poorest and sickest individuals, the joint federal-state program was initially intended as a low-cost bulwark against further government intervention in the health care system. In 1965, its first year in operation, the program cost about $9 billion in inflation-adjusted dollars. But instead of heading off further government intervention, it became the vehicle for much of the government's expansion into the health care sector. Between 1970 and 2000, the program grew from $29 billion to $250 billion in 2010 dollars.

This year the Department of Health and Human Services expects the total cost of Medicaid to top half a trillion dollars. And according to the National Association of State Budget Officers, it will account for more than 20 percent of total state spending. Medicaid outspends all other welfare programs combined, and, if not for the Medicare prescription drug benefit, it would already be more expensive than any other entitlement.

What do we get for all that money? Not much. Recent studies at the University of Virginia, the University of Pennsylvania, and Columbia University and Cornell indicate that in cases involving colon cancer, vascular disease, and several other maladies, Medicaid's health outcomes are frequently worse or no better than the outcomes for individuals who lack health insurance entirely. Yet 46 million Americans are enrolled in the program--a figure that is projected to increase by 16 million over the next decade, thanks to ObamaCare.

Shuttering the program remains politically infeasible, and ObamaCare's reliance on Medicaid to expand health coverage has dimmed the prospects for reform. But states could opt out of the technically voluntary program, and the rapidly deteriorating fiscal outlook of both Medicaid and the country means an overhaul may become necessary long before politicians build up the courage to tackle it.

The first step is to stop the matching grant funding process, in which states receive federal money for each Medicaid dollar they spend--creating an incentive for ever greater spending. Instead, the program should be funded by federal block grants indexed to the rising cost of health care. Better yet, scrap the program entirely in favor of a temporary assistance program that doesn't create long-term dependency.

That may sound radical, but the alternative is to perpetuate the ugly and unsustainable status quo, in which we devote ever more resources to a program that fails both taxpayers and patients.--Peter Suderman

Bring the Troops Home

You can't make a serious dent in government spending without tackling the military budget. And the quickest way to reduce Pentagon spending is to end, as fast as physically possible, our ongoing occupations of Iraq and Afghanistan.

So far those two wars have cost well over $1 trillion--on par with this year's federal budget deficit--almost all of it spent through off-budget, fiscally reckless "emergency" supplemental bills that smuggled in all sorts of nonemergency weapons pork and social programs. And if the wars had never been fought we could have saved something more precious than taxpayer money--tens of thousands of human lives.

We don't know how long the wars will last if we don't withdraw now, so we can't say for sure how much a swift and total deoccupation would save. President Barack Obama has promised a wind-down in Iraq that would reduce troop levels to 50,000 by 2011 and zero by 2012, but there are already signs the timetable will be pushed back. If Obama lived up to his plans, Brookings Institution analyst Michael O'Hanlon reckons, they probably would save "$50 billion to $70 billion in fiscal 2011 and perhaps $80 billion to $100 billion a year in 2012 and beyond."

According to the government's back-of-the-envelope numbers, deploying one warrior for one year costs about $1 million. Congressional Budget Office projections for the 2012-2020 costs of both wars range from $274 billion to $588 billion--and both estimates assume we will be winding down troop numbers significantly, which may or may not happen.

Even if we stop the wars now, the expense won't stop. As National Bureau of Economic Research economist Ryan Edwards noted in a July study, "Historically, the peaks in total benefits [paid to war veterans] have lagged the end of hostilities by 30 years or more, meaning the maximum effect on annual budgets ... might not be felt until 2040" It's too late to do anything about that for our thousands of already wounded vets and their families. Given the dubious benefits and indisputable costs of these continuing occupations, we should immediately stop adding to their ranks.--Brian Doherty

Erase Federal Education Spending

In August the Obama administration gave the states a $10 billion bailout to save teachers' jobs--even though the Bureau of Labor Statistics indicates that teachers aren't losing them. After 30 months of recession, local education employment ha suffered less than a 1 percent decline. In fact, education hires rose in 21 states between 2009 and 2010. By contrast, the private sector saw a 6.8 percent decline in employment.

In addition, the president has proposed a $78 billion education budget for 2011, a whopping $18.6 billion more than in 2010. Federal education spending has increased by close to 80 percent in real terms since 2001, but test scores in reading and math among 17-year-olds have been flat since 1971, according to the National Assessment of Education Progress.

Politicians have talked for a long time about eliminating the Department of Education. While this remains an...