Bertrand Russell computed that nobody should work more than 4 hours per day when he wrote In Praise of Idleness. That was over 80 years ago, before computers. Today, there is basically no reason anybody should be working more than a couple hours per week. Except..
We're consuming a fair bit more with two cars instead of one car, longer distance vacations, etc. All that warrants an extra couple hours per week, but it'd never cost more than that.
So where does the money go? You claim some things grow more expensive? Actually no, almost everything has grown massively cheaper, excluding a few commodities and maybe social security. You claim healthcare got more expensive? Again no, healthcare got massively cheaper :
http://truecostofhealthcare.org/video_presentation
You remind me that unnecessary law enforcement caused over 12% of the total increase in federal spending over the last 30 years? Fair enough, but law enforcement has grown massively more efficient too, partially to information technology, but.. We don't even bother holding trials now, if you're accused, you just negotiate your punishment with the prosecutor. If you stand up for your right to a trial, you get locked away for decades.
Really, anything you might mention, I can prove the actual costs declined. Even military costs declined.
So why does stuff still cost so much? It's many reasons, market forces, corruption, graft, exploitation, etc., but the fancy summary word is rent seeking, meaning insiders manipulating the economy to extract non-value added benefits.
Righties blame the government for this. Lefties blame the corporations for this. Both are completely correct, but corruption a fundamental feature of human nature.
We're perfectly able to create a society where almost nobody works more than they want to and everybody works on stuff they consider fun. We choose not do create this society so that rich and powerful people can become more rich and powerful.
"Because work is unnecessary except to those whose power it secures, workers are shifted from relatively useful to relatively useless occupations as a measure to assure public order." -- The Abolition Of Work by Bob Black
Additional links here : http://www.metafilter.com/124387/Workers-of-the-world-Relax