[The] fear of overreaching government is deeply ingrained in the American psyche.
This reminds me of a discussion I have regularly with my father-in-law, who makes all the usual points about people becoming dependent on big government thanks to social welfare programs, and so on.
And the fact is, I don't disagree with conservative arguments that are framed this way. Obviously it's true that if you're receiving a check from the government in order to survive this puts you in a relation of depending on the government. The problem is that this is where conservative thought seems to dry up: there's no appreciation for the fact that relying on an employer for a check produces dependency also. It's just dependency of a different kind.
For most Americans, modern life may be summarized as falling into either or both of these dependencies -- not independence. Personally, I am all in favor of classical conceptions of independence, but until that transpires, between a nominally democratic government and some corporate hierarchy, against which of these two dependencies might we hope to strike our best "libertarian" pose? We're talking about one institution which is supposed be administered by its constituents, and another that is supposed to be managed by a tiny minority pursuing narrow self-interest (if tangentially for the benefit of all).
If a fear of "overreaching government" is deeply ingrained in the American psyche, that's because people with lots of money sponsor the national mentality. We must always remember who speaks loudest on questions of what it means to be an American: it is whoever owns the means of having their voice reproduced. The rest of us only learn about it afterward from experts who draw their salaries from the same source. This is called being informed.
Americans distrust government! Well, I don't trust government, but I'd rather it come pick up my garbage than grant me the "freedom" to pay someone who knows I don't want it accumulating in my house -- or the "freedom" for my neighbors to let it accumulate in theirs, because they can't afford such "premium service." Anytime big government supplies me with an alternative to the choices that institutions constrained by the profit-motive have to offer -- more of a whole lot less, all the time! -- that is rarely a bad thing.