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There is a fundamental issue with this kind of federalism though in that it increases strife and could easily lead to civil war. Let’s say we get rid of Medicare, Medicaid, social security, and research funding at the federal level. What happens next? The West Coast and North East form compacts, companies, or nonprofits that provide healthcare, retirement and funding for their schools. The south, parts of the Midwest, and the plains fail to do so (at least to the same level) and within a generation we have two separate countries and war. |
Or do we? Some states don’t seem to want these things, or at least that’s what their representatives say. So let them experiment. My guess is the loss of benefits will outweigh the meager tax savings, but there may be a couple of states that are fine with the tradeoff. As long as people can move freely, it should be a self-correcting problem.
The problem with centralization is that it creates an all-or-nothing battle for federal control. Right now the people winning that battle don’t seem to share your vision for social programs. Could be an issue, especially with ongoing gerrymandering efforts!
In a big country with strongly polarized political opinions, federalism is the best way to fight this sort of political capture and the associated back-and-forth escalation. As tensions boil over, the only other option that can maintain a semblance of order is brutal repression.