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'You can have an immoral people, or you can have a small state, but you can't have both.'

This statement is utterly false:

I think that you misunderstood what he's trying to say. It's not saying that you cannot have large gov't with good people or a small gov't and bad people. He is saying that if you want a orderly, peaceful law biding society, then you either need to have a large gov't to ensure order(on an irresponsible people), or a moral society that will demand good behavior from its neighbors.

His point is that if we are going to achieve the libertarian ideal of extremely small or no gov't, we need to have a moral influence in society to maintain order or we will turn into a somalia (no gov't, no moral influence = total chaos). I dont' think that Somalia is any libertarian's ideal society.

Look at our nation's founding. It would be considered very libertarian compared to what we have today. And our founding fathers considered a religous (moral) influence necessary for maintaining a free society.

He is saying that if you want a orderly, peaceful law biding society, then you either need to have a large gov't to ensure order(on an irresponsible people),

Nope, that won't work. But that's what we going to do. Once you divorce the individual from personal responsibility your society will become increasingly disorderly.

I concur with your other points.

I think that you misunderstood what he's trying to say. It's not saying that you cannot have large gov't with good people or a small gov't and bad people. He is saying that if you want a orderly, peaceful law biding society, then you either need to have a large gov't to ensure order(on an irresponsible people), or a moral society that will demand good behavior from its neighbors.

Thank you, yes. That is my point exactly. And like most Americans, I think the second option is far better than the first.