One thing about the "wasteful" thing:
We live in a consumerist society. To keep everyone alive and relatively happy, only a tiny fraction of people would actually have to work. We've an excess of food, an excess of housing, lots and lots of excess. So then, if we don't have all the "useless" employment, how is everyone going to gain the capital necessary to survive in a capitalist society? There are less "useful" jobs than people.
Nowadays we solve it by making useless crap. I've got a bunch of novelty mugs on my desk, given to me by people as gifts. I don't really care for them. Is this sort of junk better than the junk the Soviets made? Yes, because they're not weapons, but it's pretty much equally useless employment. We're making tacky luxuries, and forcing people to make them just so they can survive.
So then, if we have so much excess, why not hand it out? Let people sit and be painters or whatever, giving them their necessities for free, and those who want extra luxuries can work for them by doing the actually "useful" employment.
You make a good point here and it's something I've thought about. I think the gov't of the UK and these other governments made the same argument for their welfare programs. More and more is being produced with less and less people, right? They just don't work out as well as you'd suppose it would. Welfare programs end up being relied on too heavily and become too expensive. It disincentives work. It's not clear how it should be distributed or who should pay for it. European governments are going broke trying to fund these things now.
I read that the Soviet economy was so rife with inefficient make-work in their economy, that they would have been better off extracting and exporting natural resources and cutting everybody else a welfare check, as the net of their industries for the most part was a loss of net value.
So it kinda seems silly to create make-work or stupid jobs for people, but cutting people welfare checks isn't ideal either. I think this is why the USA and developed countries have such a tertiary market, service or 'information' based economy. Not many people need to do anything productive, so they sit in call centers, toll booths and sit behind cash registers.
As for cheap crap people tend to accumulate, most of it is made in china. So even the Chinese are having problems finding productive things for their people to do, so they make cheap plastic crap and sell it to us and we buy it mostly because it's cheap.
For fun, I thought of what it would cost to cut everyone in the USA a welfare stipend check. Single people can get by relatively austerely on 12,000$ a year, which is around the gov't defined poverty line anyways. Kids are assumed to be dependents and the poverty line shifts up about 4,000$ per kid per year in a family. 27.3% of the US population of 315,000,000 people are 20 or under and assumed to be dependents. That's 229 million adults and 86 million minors. Retirees/ old people get the full 12,000 for simplicity.
Let's say everybody but the top 10% of adults gets this paycheck, regardless if they are working or not, so people don't get too butthurt and resentful of all the freeloaders. Say labor prices are reformed so wages in addition to the stipend is irrelevant. So that's 206 million adults receiving the stipend and 86 million for each minor dependent.
So the number I got was about 3.5 trillion USD (3,502,000,000,000$) a year, not counting any administrative costs associated with distributing the stipend. The total federal spending in comparison is about 7.5 trillion. GDP is 15.9 trillion. So there's that.