I think I fundamentally disagree with this outlook, but mostly on tone, not principle. Yes, I used the word "hopefully" in that sentence in a non-accidental way: boondoggles happen. A lot. They also don't happen a lot. Modern governments are huge, on a scale that has never existed before [0]. Expect frequent outliers in every direction.

Government spending must be essentially zero sum, since it almost exclusively must spend within a closed system (it'd be a bit silly for it to primarily spend on some other country's, after all). But to say that government spending can't be as productive as individual taxpayer spending is sort of misunderstanding scope. The typical person can't be bothered to deal with the coordination of funding all the things they'd like; the number of services that gently affect our lives is staggering. To suggest the individual administrate such spending is like suggesting we generate a line item for everything the government provides and be able to select what we personally want from it; there's a utopia to be had there, but holy mackerel the logistical coordination and administrative overhead for such a system would be mind-bogglingly complex and large, or the life simple, dull, and risky. I bet there's a Murphy's Law corollary somewhere that suggests such a fair replacement is at least as dysfunctional as the current system (heck, I'll just invoke the central theorem of Systemantics [1]).

Anyhow, the win here is that governments can concentrate money to generate a kind of critical mass, It can create opportunities that otherwise couldn't germinate (and, well, often don't). Some accomplishments require ridiculous amounts of money - more than a person could ever hope to have. Until very recently (say last ten years?), it hasn't been possible for extremely large groups of people to coordinate resources for extremely large technologically and logistically complex projects without also having a very direct, obvious, and positive feedback mechanism (read: short-term profit); crowd sourcing may actually be a fantastic replacement economically for government's deep pockets, but we're absolutely not there yet. And without that insane access to enormous capital, we simply can't bootstrap many of these industries. There are notable exceptions, but they're notable because of how uncommon and unlikely they are; legends arise from powerful individuals building massive industry sectors, but rarely without extensive help from the government (obligatory references to Standard Oil and SpaceX).

So we rely on the government to do such things as bootstrap super-capital intensive stuff. The sort of things that require billions to begin and decades to mature. And 50 years later, it's clearly paying off! What once required tens of billions to do once now can be done for tens of millions! And it's gotten so mature, the private sector is finally starting to compete with the government... here.

I'm not going to argue the value of a space program. It's so deeply integral to the magic of modern life it's dizzyingly complex to even contemplate listing. Like trying to figure out if it was worth Bell Labs allowing the transistor to be invented.

India's got a helluva scrappy space program. It manages to do a lot of things right, and as noted elsewhere by 'tn13 [2], it may even be profitable! (I have no idea how to figure out if that's actually true - it's tricky to figure out if individual sections of a plant are stand-alone profitable, let alone a complex government entity!)

[0] http://www.goodreads.com/quotes/104873-there-are-10-11-stars...
[1] http://en.wikipedia.org/wiki/Systemantics#Premise
[2] https://news.ycombinator.com/item?id=8364632