Then why did Palin vow to be a champion for “special needs” kids as VP if she didn’t believe in the nanny state?
It's very difficult to argue with you, but here goes.
Most Americans, even us evil conservatives, believe that we have a moral obligation to help certain citizens or groups of citizens: the very old, the very young, and the infirmed (that's an old word). That there are government programs for these citizens does not - repeat DOES NOT equal a "nanny state." They are very specific groups.
It is the compassion and humanity that we have, in that we give to those who are less fortunate. Programs like this can be administered properly, even on a large scale (government! preferrably on the state and local levels), in a way that respects both the giver (taxpayer) and the recipient. The government can also encourage charitable behavior (tax breaks, etc), and should continue and expand it's efforts when the charitable behavior involves these groups.