John Pugh, public debt and the nature of the state

At the start of the month I asked why political radicalism has become synonymous with a desire to see a permanent and massive public debt. Stumbling and Mumbling went further, pointing out that there are several reasons why the left should be suspicious of a large public debt.*

So I was pleased to see John Pugh, the Liberal Democrat MP for Southport, writing an article for Liberal Democrat Voice in which he argues that "Liberal Democrats can act to reduce the deficit and be positive about the role of the democratic state".

That is quite right and I am pleased to see John saying it. However, I am less happy about something else he says:

The trouble starts when those on the right start to regard the democratic state itself as some sort of alien monster that has sprung into existence on its own, independently of its citizens. Then ‘rolling back the state’ is identified as freeing and empowering citizens – as though we can always achieve the same individually as we can collectively.
It is precisely because of poor accountability – a distorted voting system, limited devolution and huge swathes of public services run by quangos – that people disassociate their aspirations from those of their state.

I do not regard that state as an "alien monster" and our Liberal Democrat concern with democratic reform - the thing that unites all shades of opinion within the party - suggests that we all accept that it is not about to wither away.
However, even in some future Lib Dem utopia with PR and proper local control of public services, I would be wary of talking about the state having aspirations. People have aspirations - often widely differing aspirations - and it is the role of the modern state to allow them to live in harmony while seeking to fulfill those aspirations.
To attribute aspirations to the state or to argue that it can meet all human ambitions strikes me a sort of Hegelian state worship. Rather than encourage reform, it tends to mystify the nature of government, which is a tendency that will appeal to traditional Conservatives but should not appeal to us.
The debate on the state that Liberal Democrats should be having is that outlined by Ronald Dworkin:

The practical problem is this: there are certain things we all want government to do. We want government, for instance, to select methods of education, to sponsor culture, and to do much else that looks, on the surface, like endorsing one set of personal values against another and therefore contradicting liberalism.
It is very important for liberals to develop a theory that would make a distinction here between enriching the choices available to people and enforcing a choice upon people.
The crucial idea, it seems to me, is the idea of imagination. The liberal is concerned to expand imagination without imposing any particular choice upon imagination.
But I've simply named a problem. I haven't met it. It does seem to me that liberalism is rather weak at this point and needs a theory of education and a theory of culture-support that it does not have.

* It was William Cobbett who pointed out that we have the Crown Jewels but a National Debt.