Andir, actually the defense and earmarks aren't such a big part of your tax dollars.
A fifth to a fourth of the entire national budget is a pretty big part, its pretty much the same chunk as medicare and social security (combined, of course, they take up twice as much).
Social security could be made more efficient, but its really not fair to talk about as a portion of the budget, since it has its own input stream. Its closer to its own side budget thing. Which means defense spending is neck and neck with medicaid for "biggest chunk of the general budget"
Personally, I'd support big cuts in all three areas. I'd actually support scrapping medicaid/medicare completely and replacing it with a comprehensive national health plan. I'm libertarian-inclined in many ways, but I consider healthcare to be an infrastructural problem, and almost anything would be better than being handled by the insurance industry.
Andir, I think the problem with that is that a functional Libertarian society rests on a population who's capable of living in it. Failing to educate kids so as to disincentivize the parents leads a whole host of destabilizing societal problems that extend well into the future. And it doesn't really work all that well, because people are terrible at thinking long term like that (perhaps due to their terrible educations?)
If we're talking about our optimal setups, though...
Social Security would be gone.
National Healthcare, no more health insurance
Negative income tax, but with a good deal higher tax rates on both income and corporate operations
No welfare programs (beyond the healthcare and -income)
Minimal defense spending (capped at 3% of budget)
Creation of a government Research and Development department, whose sole purpose is to develop effective government strategies
Greatly increases general science budget, strong research focus, especially on projects that require huge budgets
Large focus on education (Though in my mind, the education system would be much different from the one we have now, focused on developing excellence and instilling in the rest a civic-mindedness and knowledge needed to be a good citizen rather than most of the general purpose crap it shovels out now. I think school should be about helping people find their place in a dynamic society rather than churning out a bunch of automatons)
Overall, our budget would probably be the same, if not larger, so I'm probably a terrible libertarian, but I believe the governments primary responsibility is to grant its citizens freedoms - to take risks, to find their place in society, to work and achieve as best they are able.
Fake-edit:
Also,
11 14 15 goddamn posts. Wow. Super-ninjad.