First, we should note that the tendency to rapid growth in public sector expenditure measured as a share of the economy stopped sometime during the mid- to late-1970s. From then on, we have seen stagnation even if economic growth obviously means that expenditure has increased since the early 1980s.
Second, the growth in relative expenditure in the last years must be seen in the context of the global financial crisis which a) saw GDP fall in many countries and b) saw increases in unemployment which again meant that a share of the workforce had to rely on some kind of public support. This is what the Keynesians call automatic stabilisers.
Third, the economic policies of Republican administrations and congressional majorities in the US are a cause for concern. The idea that tax cuts are the solution to any problem is by now intellectually – but not politically – discredited and the massive deficits created by Republican policies are a major problem for the US and world economy. In fact, US economic policy is a major theoretical and practical headache.
Kurrild-Klitgaard is right that special interest groups (farmers, anyone?) create a lot of blocking points in the policy process and that it is easy to find cases where resources are being spent in a way which is inefficient in the short or long run due to government programmes (my own example would be the Danish Early Retirement Benefit but in the US defence spending could be used as a warning case). It is also correct that the demand for services and transfers is in principle inexhaustible.
But this does not necessarily mean that the public sector is dysfunctional or uncontrollable as a whole.