> But realistically how could Montana get an 80% increase in efficiency while providing similar services to the federal government?
By removing all the strings. The problem with the existing federal programs is that they're numerous, complex and individually small, which is the recipe for inefficiency. That results in high administrative costs -- not only for the government but also for the recipients, and only the first cost is actually accounted for in the government budget, even though the second is much larger. Because government agencies do their tasks as a full time job but the recipients are novices who have to amortize the cost of learning and using the system over only their individual use of it. Again, suppose someone has to spend five hours a month to navigate a program that pays $80/month. Then if their labor is worth $10/hour, just their side of the transaction contains $50/month worth of inefficiency.
Even the fact that housing grants have to be spent on housing is inefficient, because it distorts the market for the thing being subsidized:
> And according to normal economics textbooks increasing market rent isn't destroying value. If more people move to a city which drives up demand and rent. Economists don't think of that as value destruction. In classic economics textbooks the value destruction caused by subsidized rent is that some people will spend $1000 on rent that they would never rent without the subsidy because they only get $800 of value from it + the dead weight loss of the taxes that funded that subsidy.
But this isn't caused by more people moving to the city, it's caused by the people who already live there getting a bunch of money they're only allowed to spend on rent. Then some of them would prefer to have fewer roommates or a bigger apartment, so they try to use the money for that, which requires the people who would otherwise live in those other apartments to have to outbid them, causing everyone to have to pay higher rents on the same apartments.
Meanwhile the rent increase goes to landlords who typically remove it from the local economy, either because the building isn't owned by a local to begin with, or because the owner is a wealthy person who then invests the money in index funds etc. which transfers ~98% of it out of the state. So the value isn't "destroyed" but it immediately leaves the state, which from the state's perspective is basically equivalent.