New Federalism works


While I have a mostly conservative outlook with some admittedly libertarian economic views, one of the “isms” that I fully endorse is the concept of New Federalism. At least, I think I do. (It seems no one can agree exactly on what a New Federalist believes, for sure.)

At the heart of New Federalism, however, is the belief that the U.S. Government is doing many more things than it should be doing, at least according to the Constitution. The Constitution says that anything not specifically addressed in the Constitution as belonging to the national government is reserved for the individual states to decide. Sometimes they call this States’ Rights. But the general idea of the word “federalism” is that our government system is made up of a coalition of individual states – a Federation. In such a system, the governing is shared between the national structure and the state structure.

When this type of system is working properly, you basically have a system where states would “compete” with each other. What are they competing for? Your support. Your tax dollars. Your settling down and raising a family there and bulding a life there. Your kids going to college there. You buying a home and paying property taxes there. They compete for people to agree with their system of living. In this system, they are also free to experiment with new ideas, systems, structures, and strategies without interference at the national level.

Two recent news stories highlight how New Federalism works:

The first is from Hawaii. After  months of Universal Health Care for children, the state is cancelling the program. (story here) Why? Because the program didn’t work. It caused unintended consequences. It hurt the state more than it helped the state. Hawaii tried an experiment and it failed. Is that the lesson? NO! The lesson is that all the other States now benefit from that experiment. They all now know a way of providing for child health care that doesn’t work – and if they are wise – they will learn from it. This all happened WITHOUT any national program, and it happened without risking every single state. It was a laboratory experiment that all 50 states can now learn from.

Here’s another example. NY Governor David Paterson abandoned his idea of the “nuisance tax”, also called the “fat tax”. (story here). The lesson learned here, for poiticians everywhere, is that these kinds of taxes are NOT the way to be re-elected! But again – this is a great example of how New Federalism would work. New York tried something that hadn’t been tried before – and now all 50 states get the benefit of seeing what happened and evaluate why.

Ronald Reagan tried to return some balance to the states during his tenure. One of the ways he did this was through the use of “block grants”. A block grant is a chunk of money given to a state to solve a specific issue. How the issue gets solved, what program is to be implemented, what strategy to use is up to the individual state. (of course I have to mention that it would be better if the money never went to Washington in the first place – but let’s take this a step at a time, shall we?) But again, this allows the state to decide how best to solve the issue and keeps accountability closer to home – which is always a good thing in politics.

You Libertarians out there should be all for this idea, too, because it is a first step toward your way of thinking. Think about it this way: If California wants to have gay marriage and abortion-on-demand and open borders and universal health care – then LET THEM. Let the people of California govern the lives of Californians! If they spend themselves into oblivion and make a mess of things – LET THEM. (as long as it doesn’t harm the other states and they don’t come running to the U.S. for a BAILOUT!)

But if Indiana (the state I live in) decides NOT to have those things be true, then we should be allowed to decide that for ourselves, too. If I want to live in a state that is the opposite of the Californian beliefs, then I could choose to live in one! If things go well for a state, then that state becomes an attractive place to live. If not, then people would have some incentive to leave the place. WHAT’S WRONG WITH THAT?

The U.S. Government does too much. It does far more than is spelled out in the Constitution. The current administration is even seeking to expand the role from where it is now!

When thinking of New Federalism, I often think of that Lending Tree commercial that says, “When banks compete – You Win.” The same could be said of New Federalism: “When States Compete, You Win.”

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6 Comments on “New Federalism works”

  1. avin kline Says:

    Completely agree. Great thoughts.

  2. Eric H Says:

    It’s certainly a step in the right direction and very preferable compared to our current situation. No logic bomb, but might I suggest that you think about taking the next step – thinking about a minimal state government. After all, aren’t local governments in a better place to make decisions for their citizens than the state governments? Then you’d have even more competition. Of course, there are economy of scale issues that would then have to be addressed for efficient provision of public goods. If left to the local level, voluntary associations would probably develop between local governments to arrange for their provision. That, of course, would be a much more stable and advanced version of New Federalism in my opinion. If you feel like you might agree with that, let me know and we can start talking about which public goods might not even need a local government (let alone state or federal).

  3. jermtech Says:

    I like the way you think, Hollering. And I do agree. Block grants are like a “bare minimum” step in the right direction. But oh my gosh, how the critics hate them! They want national control over everything.

    If they are that passionate about block grants, how would they feel about, say, education being controlled locally? The outcry would be deafening.

  4. Eric H Says:

    If I don’t write something about what I was thinking today regarding minimal government within the next few days, someone nudge me. I had some thoughts I want to share but I’m too busy to share them tonight.

  5. euandus Says:

    See if you think I’ve got it right in how I depict federalism. I had several replies to my posts so I wrote another in defense of the governmance system. If you are interested in having a look, here is the link.

  6. charles Says:

    so not to be mean but didnt the small govt. no interfering republicans make the terry shivo(not spelled right) bill that was a law for 1 person… me thinks both sides get into peoples lives too much and it just depends if you like R or D in front of the guy your voting for… just something to think about maybe???

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