It depends who you ask. For us anarchists it's the most beautiful thing there is, and millions of us have died through the century for these ideas of unlimited freedom and equality.
> in the USA, the relationships between states seems like a well functioning form of anarchy to me
not really? I mean there's a federal government ruling from above, no? You couldn't just have a State abolishing wage slavery and private property and declaring food and housing for all, could you? I'm betting other States would send the federal army to crush this rebellion, but admittedly my understanding of US politics is limited. I'm basing it on how the federal government has dealt with indigenous nations (crushing and betraying them at every turn) and the war of secession, during which both sides were happy to exploit black people but many soldiers killed about how to do it precisely.
> I am very socially liberal but I would like to see a much smaller government - a weird combination that is probably impossible to achieve.
You may be interested to read some anarchist literature, because it's not a weird combination at all. Maybe Emma Goldman or Murray Bookchin could be of interest to you to get started?
Obviously our system is rigged, and has been for centuries. I accept this and don't spend much time worrying about US Congress people being able to do insider training, accept more contributions than I am comfortable with, etc. That is the way the world is: corrupt.
That does not mean that we can't push back when we can by not accepting corporate news media (MSNBC and Fox News seem like the very worse, but they are all bad) and focus on our own productivity and on treating other people with kindness. I am very socially liberal but I would like to see a much smaller government - a weird combination that is probably impossible to achieve.