Intellectual Consistency #2

Does there ever come a point at which each person would question the necessity for the existence of government? Notice, I am not asking if it is preferable; I am only asking if there is something (i.e. a law, action, prohibition, requirement, etc.) that the government could "do" that would make each person question its very existence.

I am asking because the recent financial crisis has supposedly shown that the free market has failed (I say supposedly because I don't believe this to be the case at all). As a result, the assumption is that we require government supervision and regulation to fix it. So in order to remain consistent, it seems like there should be a parallel standard for the government; that is, if the government fails at something, we should take away its ability to continue doing it.

It seems to me that there are more people who would instinctively criticize the free market for something, and automatically say the government should fix it. In fact, I would bet there are more people that would advocate total government control (from a perceived omnipresent failure of the free market), than would advocate a total free market without government at all.

At the end of the day, I'm not curious about whether a person would ever believe having no government is plausible or preferable. What I am curious about is if each person has the intellectual consistency to at least say "since each failure of the free market warrants an increase in government intervention, that means that each failure of the government should warrant a decrease in government intervention."

Of course, I'm not optimistic about this being the case. No matter how many times the government makes a mistake, the reaction is always that we need more government to prevent the mistake from ever happening again... until it inevitably happens again. Not to mention, how often do people even admit that the government made a mistake, and not react as though the government is a clumsy child (i.e. by properly saying "I've had enough, the government is no longer permitted to do this ever again," rather than the typical reaction which is something to the effect of "Awww, it was just poorly implemented and an honest mistake, it won't happen again if we give it the resources to do X").

So I really want to know: if you have any intellectual consistency, what would it take for you to think that the government is a nuisance through and through and should no longer exist? Or let me make it more pointed: if we theoretically established and agreed beyond a reasonable doubt that everything the government does is harmful, would you then admit that it should not exist, or would you continue searching for ways to make it less harmful?