You naively assume that there would be nothing else to fill the gap that would be created if the federal/state government just stopped existing tomorrow.

It's same argument as "who would build the roads if the government didn't exist??". Which is also quite naive, because the government doesn't actually build the roads. It forcefully takes tax payer money and then hires a contractor like any other business would to build the roads. If the government stopped existing businesses and individuals would still need a way to transport their goods, so they would just get together and hire contractors to pave roads so they can deliver goods to customers.

Same goes for just about every government program in existence. Before government welfare people would go to their local church or their community for assistance.

Government run schools have had dropping reading scores for decades even though they have more money being shoveled into them then ever before.

College Tuition costs are through the roof because the government got involved with giving out student loans.

Etc. Etc. Etc.