Liberty or Death

One of the most common and most ridiculous arguments for the justification of the State's actions is "social contract". From the left we see them yell for the social contract to justify taxes on the rich to help the poor. From the right we see them yell for the social contract to justify "helping" spread democracy world wide. We even hear it from Constitutional libertarians justifying the monopoly the State has on defense and judicial services.

But what exactly is the social contract that they claim has power over individuals? What justification is used to apply this social contract in government legislation?