New Society
If all government functions are removed, there will be a void left by the various functions that the government used to fulfill. These voids will quickly be filled by entrepreneurs striving to get a hold on the market. Mail delivery, garbage collection, retirement savings, banks, employment offices, and insurance will all be growth markets for a while after the change is made. Garbage collection for example will become a competitive industry where multiple corporations have to vie for the right to take out your trash and dispose of it. It will be like all currently government run indutries are suddenly privatized. The United States Government as we know it, ceases to exist as a national entity. It is reduced to a small legal system with only four crimes. Other countries will no longer be able to deal with the US as a single entity, since it no longer has a president or ruling body. You cannot deal with the US as a whole, you must deal with citizens as individuals. You may think that this would make us a ripe target for hostile foreign invasion, but it is in the citizens own best interests to defend their land, so they would organize and maintain militias. It's impossible to counquer a country in which every citizen has an automatic weapon and will fight to defend their land and their friends land. Every household would be a battle as foreign soldiers compete against armed civilians defending their homes. This would be unbelievably unpleasant for any occupying force. As a result, nobody would ever invade. If a group of citizens were feeling particularly altruistic one day, they could write up a contract/charter for the forming of a regional militia, in which all who wish to join are included. It is a sound idea to protect what is yours. To protect what is yours from foreign invasion, you need weapons. In a free market, whenever someone is willing to buy something, someone will make and sell them what they want to but, for a price. If everyone wants assault rifles, a company will start up to fill the void in the market. If people can afford to purchase tanks for self defense, someone will build and sell them.
This whole system only works if the majority of the population are responsible, thinking members of society. Altruism is often a sound idea, economically speaking. There will always be criminals in any society, but the more free the society, the less profitable it is to be a criminal. If everything is already legal, then theft is the only really profitable crime, and people usually fight to protect what is theirs. If some people are paranoid, they will band with their neighbors and friends to protect each other. Strength in numbers. There will be probelms in this society, but less than in our current society, and people should be able to solve them with minimal difficulty. The populace will take care of itself, if you let it. Right after the change, lot's of people will find life difficult and some will die, but in order for the society to work, all it's citizens have to be fairly smart, free thinking individuals. Anyone else will eventually either die, be cared for by an altruistic citizen who does fit the requirements, or leave and go to mexico.