Maybe my brain has been too rotted by listening to Noam Chomsky in my youth, but government spending and capitalism are two sides of the same coin. Everyone in washington is a capitalist, maybe withstanding 1-2 representatives. Large corps are constantly communicating with our leaders, far more frequently than their private constituents. To think that there is some secret, powerful office of the government where they are trying to dismantle capitalism through the use of welfare is a bogeyman. Welfare is there to prop up the ideology of capitalism as it smears against the rough road of reality.
Capitalism is primarily concerned with production, not welfare. Its central dogma is that society's welfare is naturally maximized along with its productive capacity, but there is essentially zero acceptance of that point of view anywhere on Earth, certainly among those in power.
Arguably the optimal operating point for an economic system, from a GDP point of view, is to maintain just enough public spending to keep a Robespierre from arising from the unwashed masses. Public spending beyond that is an unproductive waste.
Most of us would agree that sacrificing everything else on the altar of GDP is not what we want to do, though, so the (perfectly legitimate) question of where the compromises need to be made is always going to be on the table.
