I think there has been a very pernicious, detrimental focus in recent history on ensuring "happiness." Life is not about being happy. Communities do not exist to make people happy.
A thriving community is one that provides needed support to its members, "needed" and "support" being variables defined by those members.
> The evidence seems to be that the bigger the government, the wider the gap between the rich and the poor. This might sound counter-intuitive, but that's the date we have.
Define "bigger". Germany, France, Sweden, Denmark, all have governments that are significantly more activist in the daily lives of their citizens, and the wealth gap does not exist in those countries like it does the US.
http://en.wikipedia.org/wiki/File:Gini_Coefficient_World_CIA...
I don't know many that would say, per capita, these governments are "smaller". But they do actively redistribute wealth, a large part through social health care, higher education and retirement systems.