Sort of backwards from that. The counter argument to "If you've got nothing to hide..." usually revolves around the fact that you're always breaking laws, just because we have such a tangled legal system. So if you fix the legal system, then there's no cause for worry.

Yes, there's the privacy issue, but I'd bet that could be handled.

No, the counter-argument to "If you've got nothing to hide" is that there are lots of perfectly legal things that you don't want other people to know. Maybe you're gay and you don't want your parents to know. Maybe you don't want your abusive ex-husband to know where you live. The more people that know a secret, the harder it is to keep.

Remember, the government doesn't know anything, people working for the government know things, and the more people that know a secret, the harder it is to keep.

Right, so that's the privacy part. It seems to me like that ought to be addressable- there's already plenty of people who become privy to private information for this or that reason, and it is very rare it becomes a problem.

Unless the system is significantly improved, yes, it probably entails some increased risk to your personal secrets. But to immediately shut down any suggestions of increasing government application of tech on those grounds seems short-sighted and selfish. There are positive outcomes, too! I'm not saying "forget about privacy, it doesn't matter", but rather "shouldn't we try to work a compromise?". Find a balance, where any increase in risk to personal privacy is counterbalanced by a respectable improvement in the capabilities of government to operate effectively. If we are stoic and immovable on the issue, we just impair our own government when we limit them to 20th century technology.

The main fallacy of your argument is that you assume you can somehow prevent corruption by technical measures, when the only lesson you can take from history is that government corruption is a question of "when" and "how", not "if". And you're saying "it might be useful" without offering even a single example. (In general you need at least two example to generalize from, you know)

Could you actually give examples where more government knowledge is helpful? Strike "crime fighting" out, because e.g. London's MET police, and the FBI already have almost-all-knowing access to data, and all reports say it doesn't help at all.

In the 2nd half of the 20th century, Eastern Europe and the Soviet Union, are full of examples of why government knowledge of everything is bad.

Assume government knows everything you do, all is fine, and then one day, Hollywood gets a law that says you can't watch a DVD with friends (you each have to own an independent copy, so that they get paid). Bam, instant enforcement the next day, because the government knows everything. An almost-as-ridiculous law was almost passed (the recent ACTA treaty), and it's not a coincidence that demonstrations in Europe (especially former eastern block, who have actual experience with that) were far more numerous and vocal than in the US.