[BrazzVuvuzela]

Seems like an arbitrary distinction which is considered important for historical/cultural reasons particular to America. Why is the federal/state boundary the important boundary, and not the state/county level? Or not the county/town level? Or the global/national boundary? Even having 3 or 4 layers of government is an arbitrary cultural trait. It could be one or two, or five or six.

[jcadam]

In theory, the US is a federation of sovereign states (i.e., the federal government is a creature of the states, states are not supposed to be merely political subdivisions of the central government). Domestic affairs are supposed to be largely the realm of the states, with the Feds responsible for foreign affairs.

Which is why the federal government uses federal funding for roads, health care, welfare, etc., to coerce states to do what it wants domestically, rather than just dictating to them directly.