Governments will fail you, every time and without fail.  You say by nationalizing everything we can minimize instability, but what happens when the politicians overpromise (as they do) and underdeliver (as they do)?  Throw equal protection to the wind and keep raising taxes, so that if you make below x you pay NOTHING and if you make above y you pay nearly everything?  You can call all those entitlements "mandatory" expenditures and leave them out of budget considerations, but they are eventually going to consume the entire thing, and when they have to be reformed or cut back and the people who rely on the government for everything are pissed, we'll long for the days when the instability in our country was confined to Wall Street.

Le sigh.

The beauty of the free market is that it has so many smaller "points of failure," as you call them.  If one fails, the whole country doesn't collapse in on itself.  Case-in-point: this current crisis is huge and was created by a lot of companies making bad decisions (and more than a little government meddling to get them to do things they wouldn't otherwise do), and big as it was, it would have passed in time even without the government bailouts.  If anything, the bailouts have cushioned the fall and ultimately prolonged the pain.  But when they fail, life goes on.  When the government, or "one giant point of failure," goes belly up, that's it.  Game over.

I think you'd find that if the government went belly up, even with a separate "free market", it would still be "Game over".
Hell our economy is so damn finicky that 9/11 created major waves. I'm still wondering how the hell our economy would survive a real war. Lets see if it recovers New York being taken, or obliterated, by an enemy nation. One of the lesser reasons I simply don't trust it...

Our government, rather you see it as a republic or a democracy, is a manifestation of us "doing things for ourselves". Our government is a conceptual extension of our society, granted powers by society to set rules that govern the society.

Unless by "ourselves" you mean each of us as individuals. In which case... I can't provide an education to myself, or defend this country by myself, or perform surgery on myself, or repair all the roads myself. If you think that government is there to do what we can't do by ourselves as individuals then we really should have a government-provided medical program.

I agree with that idea. The only thing is, which is slowly becoming my new catchphrase in this messed up world, I hope you morons don't take us down with you.

In some ways, you are correct, assuming you see continuing to live within the U.S. borders in the same way as you see license agreements like "by installing this software you agree to be bound by these Terms of Use."

The key difference, however, is in every government's monopoly on the use of force.  Companies can bind people through contract, but it doesn't have any special rights beyond that of normal citizens.  They can sue you for breach of contract, but they can't take your house (without government's help) or throw you in jail if you don't comply with their terms.  In short, they have no inherent rights that you yourself don't have.  To say that there's no meaningful difference between governmental force and private enterprise, you're glossing over the biggest thing that makes them different.

But those are simply measures of force. We, as citizens, use the government's services and abide by their "Terms of Use", and so do any companies operating on the land of the government. Think of it like this. Your a customer of a large conglomerate and the contract you've agreed to holds you to certain restrictions but also offers some protections. Through this "master contract" you deal with one of the conglomerate's subsidiaries, perhaps with a lesser contract of their own, and they feel you violate it. In lieu of a government to turn to in order to punish you because they lack the means to do so themselves, they turn to their parent company which has much more muscle. The conglomerate then decides, per the contract you agreed to, how to punish you. Maybe they even decide to end the contract: exile if the conglomerate's service is land!

The ability to make the rules and punish is merely a question of power. We give the government, or that conglomerate, the ability to make laws and punish us for infractions, and that "big difference" isn't so big. Conceptually it's the same thing; it's only the scale and names we give that differ. Reference any number of visions of the future that have government replaced by corporations; each with their own militaries, etc. At that point it's really just many small governments.

Quite oddly I'm reminded of a situation that took place some time back involving - of all people - President Bush. He attended some convention that had a comic who quite aggressively made fun of him. People were calling for some legal punishment because they believed that the president qualified as a "captive audience" that couldn't "not listen" to what the comic was saying, because to leave would have been a breach of protocol.

Now lets say you have an area that was once prosperous due to the steel industry. The steel industry then packs their bags and moves overseas leaving the area with high unemployment and little opportunity. As time passes, companies of the past pull out or go out of business. The JC Penny's and Sears, which once had tiny shops, lose interest in remaining in any capacity. In short, the area is commercially dying. Then in swoops WalMart - giving everybody in the area someplace close to shop for food, clothes, and essentially everything. The last remaining shops buckle under the competition and WalMart becomes the only place within 50 miles to go to for everything you need.

That starts to sound pretty similar, doesn't it? WalMart specifically went there in order to corner effectively every market and give the locals no practical alternatives. Aren't they, then, effectively a "captive audience"? Sure they could logically and legally go someplace else, but can they do so practically? Heck, nowadays, could older people getting retirement afford the gas to go someplace else, far away?

The difference is I don't believe that comic thought to himself "I'm going to pick on the president because protocol won't let him leave". I suspect WalMart thought the exact opposite. The free market is built around the type of thing WalMart just did - placing your stores such that you run the competition out and become the primary source of products for those nearby. That's morally as bad, in my opinion, as was implied by the accusations against the comic.

So while you inherently distrust government, I inherently distrust the companies that make up the free market. The government is, at least in theory, answerable to us. That WalMart that's exploiting the people in that area... who are they answerable to for their actions?

P.S. I grew up in that area. I saw the smoke stacks of a now-abandoned steel mill from my back yard. My aunt is a person on retirement that can't afford to go far away for groceries. There's a WalMart planned to go up in a neighboring town, not far away by rural standards.