The federal government underwent a massive expansion over the course of the 20th century. You're limiting yourself to the period following its expansion and then claiming it hasn't expanded very much since then.

>The federal budget has grown, but most of it has been in the form of transfer payments--money that goes straight from one private citizen to the other.

Privatizing the inefficiency doesn't make it go away. Taking money from middle class taxpayers and giving it to Solyndra was not a good thing. And increasing the amount of money on the table for redistribution very much exacerbates the problem of distributive issues crowding out other important federal concerns for voter attention.

>What makes you think that having 50 different poorly run versions of any given social program is a better idea than having 1 somewhat less poorly run version of any given program?

Local programs have greater accountability and can be better tailored to the different needs of local populations. If a specific program isn't meeting the particular needs of a given state, that state's legislature is more likely to have the right incentives to fix it than Washington. If a state's legislature is wasting money on boondoggles, the cost of such things is born by a more concentrated set of taxpayers who are consequently more likely to demand accountability and shut down wasteful programs. And reducing federal spending would reduce the amount of unjustified subsidies that flow from high population states to low population states solely as a result of the low population states having the same number of federal senators.

Also, this:

"It is one of the happy incidents of the federal system that a single courageous state may, if its citizens choose, serve as a laboratory; and try novel social and economic experiments without risk to the rest of the country." -Louis Brandeis

I'm using the period since 1960-1970 because the character of the economy hasn't changed very much since then. Yes, the federal government was a lot smaller in say 1900, but at that time 40% of the population lived on a farm, versus almost nobody today. The appropriate size and scope of government for an agrarian society is not the same as for a burgeoning industrial society is not the same as for a mature service-oriented society.

> Privatizing the inefficiency doesn't make it go away.

Complaining that the government is big and that the government has inefficient policies are two separate complaints. The fact is that once you take out parts of the government budget that are simply taking in checks from one group of people and getting them to another group of people, government expenditures have actually been shrinking relative to GDP. Now, income redistribution may be a problem, but I'd argue it's a separate problem to "government is too big."

> Local programs have greater accountability and can be better tailored to the different needs of local populations.

This is a theoretical trope that is almost wholly not bourne out by actual facts. In practice what happens is that there is far less attention paid to local politics, which means that local government programs can get extremely dysfunctional before anybody starts paying attention. There is pretty much not a single state government that's as well-run as the federal government (except e.g. VA and MD, but its easy to be well-run when you're massively subsidized by the defense budget). A lot of that is due to the fact that state governments get far less scrutiny.

> the cost of such things is born by a more concentrated set of taxpayers who are consequently more likely to demand accountability and shut down wasteful programs

C.f. San Francisco.

> "It is one of the happy incidents of the federal system that a single courageous state may, if its citizens choose, serve as a laboratory; and try novel social and economic experiments without risk to the rest of the country." -Louis Brandeis

Yet the history of federalism has been that the only experiments states are interested in running are how to suppress minority groups and women.

Huh? My family balances its budget. My Homeowners' Association balances its budget. My city balances its budget. My county? Well, it doesn't balance its budget well, but it's part of an urban area run by liberals... go figure. My state balances its budget. My Federal government does NOT balance its budget or even make an attempt to. What fantasy cherry picked stats would you use to show how the Federal government is run better than the states.

For most things, local control is better than centralized control. We've swung way too far in the centralized direction as a result of the Civil War. Rather than having 50 states that provide different solutions and environments, we mostly have to suffer under the failures of the Federal government.

Additionally, the point is that SOME STATES DO MANAGE AFFAIRS BETTER THAN THE FEDERAL GOVERNMENT. If I agree with how those states manage, then I can move to them. Unless I want to relinquish my citizenship in the USA, I am trapped with one Federal government that sucks.

http://www.washingtontimes.com/news/2011/jul/29/republican-s...

Virginia, Louisiana, Missouri, North Carolina, Minnesota?

Subsidies are what they are. Crappy accounting practices at the State and Federal level are what they are.

The fact that states makes an effort to balance their budget says something about the greater accountability at the more local levels. Our Federal representatives don't even appear to have a modicum of shame over the fact that they don't even budget anymore. They just keep raising the debt ceiling, passing continuing resolutions, and printing money. It's astonishing that there are people who defend a centralized system that is completely unaccountable and destroying the country.

Virginia, Louisiana, and Missouri receive more federal dollars than they pay in taxes. For Missouri, the net amount is 2.8% of GDP, Louisiana gets 4.4% of GDP, and Virginia gets a staggering 11.2% of GDP.

North Carolina and Minnesota look pretty good, but they were up there with New York and Illinois in terms of budget deficits a couple of years ago: http://www.wral.com/news/local/politics/story/8049206/

You don't see the irony in this context of asking for a state that pays more in federal taxes than it receives in federal dollars but still manages to have good finances? The reason New York (87%) and Illinois (111%) have such difficulties to begin with is that the federal government extracts so much more from their tax base than they get back in federal money. Minnesota (199%!) pays a higher percentage than Virginia (-145%) receives.

( Numbers are 1990-2009 federal taxes minus spending as percent of state GDP, from here: http://www.economist.com/blogs/dailychart/2011/08/americas-f... )

It's about the discipline of balancing a budget, not the exact amount of money you get to balance.

Because balancing a budget is easier when you have more money?

That may be true; it still doesn't tell you what the appropriate size is for each of those. Moreover, I'm talking about the size of the federal government, not the size of all government. I want government to make housing and education more affordable and provide for the care of the elderly etc., I just want it to happen at the state rather than the national level.

>Complaining that the government is big and that the government has inefficient policies are two separate complaints.

One is related to the other. The bigger you make something, the more surface area you create for corruption and waste. Look at the F-35 -- the estimated lifetime cost of that program is a trillion dollars. And most Americans don't even know it exists, because the national attention is focused on medicare and how to raise the tax revenue necessary to continue funding all of the programs that need not exist at the federal level.

>The fact is that once you take out parts of the government budget that are simply taking in checks from one group of people and getting them to another group of people, government expenditures have actually been shrinking relative to GDP.

The parts of the budget "that are simply taking checks from one group of people and getting them to another group of people" are the programs that I'm arguing shouldn't exist at the federal level.

>In practice what happens is that there is far less attention paid to local politics, which means that local government programs can get extremely dysfunctional before anybody starts paying attention.

I can see how this would be true in 1985 when a citizen's connection to the state capitol was almost entirely made up of the local newspaper's capitol reporter writing a weekly column on zoning regulations that almost nobody reads, but that was before the internet.

And a big part of the reason people don't pay attention to local politics today is that the federal government is doing the things the states should be doing. People aren't going to pay attention to things they don't care about. They care a lot about spending programs and taxes.

>C.f. San Francisco.

I'm not going to argue that there has never been an example of state-level waste or a mismanaged state or local government. The point is that when there is a mistake, the scope is limited to that area and we get a baseline in what the other states are doing to compare it against to determine how well it's working.

>Yet the history of federalism has been that the only experiments states are interested in running are how to suppress minority groups and women.

I'm not talking about repealing the Civil Rights Act. Things like that don't cost a lot of money.

And your statement is clearly false. California has been running a profoundly different public university system than, say, Texas. The services offered by New York are better tuned to the needs of citizens in a thriving metropolis. The services offered by Wyoming are better tuned to the needs of citizens living in rural areas. Why should we be so keen to crush local diversity and choice in spending programs?

Federal laws are terrible at things like that. Here's one important example: Most federal programs and taxes don't account for regional cost of living. So someone living in San Francisco making $70,000/year is paying a much higher federal tax rate, and is eligible for a much smaller subset of need-based federal programs, than someone living just outside Kansas City doing the same job who makes half as much money but also pays half as much for products and services and thereby achieves the same standard of living.

I love how you twisted the previous poster's point of "size of the federal government" into number of employees. Them's weasel words right there. We all know that the important factor of size is the budget, which has grown by any measure you care to discuss.

Probably the best measure is in terms of a percentage of the GDP. We're up over 24% of GDP now vs historical 18% or so, no time to Google, but I think that's pretty close.

Twisting people's arguments is a sad way to have a discussion about important topics.

It's not clear that, in economic terms, the size of the budget is the most important factor. Transfer payments, which go directly back into the private economy, do not have the same effect as other kinds of government expenditures. This is especially true for transfer payments like social security. Consider: young people would be taking care of old people even without social security. Social Security, in a sense, just brings those transfer payments onto the federal ledger. Is $10 billion of social security transfer payments, most of which would have happened anyway, the same in terms of economic impact as spending $10 billion to hire TSA employees or spending $10 billion to make bombs?

It does more than that. It makes the payments unconditional and divorced from family. If someone's children are paying for their retirement, they're more likely to stay in close contact because of the continuing dependency. The grandparents are more likely to live in closer proximity to their children and grandchildren and impart their wisdom rather than moving to Florida to play shuffleboard on cruise ships. Parents who know they'll have to depend on their children in their retirement have a greater incentive to care about the success of their progeny, etc.

And that's assuming the payments go to the same people as they would under a state program or with voluntary individual action. Social security is very poorly implemented: The richest taxpayers pay the lowest percentage of their salaries in social security tax and then receive the highest benefits. Millionaires living in mansions receive larger social security checks than retired Walmart greeters living in hovels.

Moving things to the state level gives us an opportunity to rethink all this. Stop sending Warren Buffet a social security check and instead have him pay to subsidize living expenses for the retired working poor based on need. Let middle class families with successful middle class children handle their own affairs internally rather than having the government use force to take from the son to give to the father.

And let me ask this: If transfer payments did nothing and had no economic effect, what would be the argument for keeping them? If they have no effect then keeping them is just wasting resources on government bureaucracy to redistribute the money pursuant to the broken window fallacy.

Another way to look at it is: consider two governments, both spend 30% of GDP. The first spends 25% on bureaucracy and the military, and 5% on transfer payments, while the second spends 10% of bureaucracy and the military, and 15% of transfer payments. Which government probably has a lower economic impact? Which government probably has more "fat" to trim?

Every time you remove individual choice from making decisions about how to spend money and in its place substitute aggregate government spending, the efficiency of the system plummets. That's because the higher you move up the hierarchy, the less decision makers care about spending other peoples' money. It's the reason why markets tend to be efficient and government programs tend to be wasteful.

So you can't just say, "since citizens would spend money on x, we might as well create a government program that spends money on x".

The size of the budget is what's important. A government's ability to spend money is a government's power. Far from being a wash, transfer payments are government exercising its control.

For the last 40 years (leaving aside the spike caused by the response to the repression), federal expenditures as a percentage of GDP have been around 20% of GDP: http://stats.areppim.com/stats/stats_usxoutlaysxgdp.htm. During that period, discretionary spending as a percentage of GDP has fallen. That's not consistent with a narrative that the government has kept growing this whole time.

I made a statement in support of Federalism as a basis for our founding. You said:

This is middle school civics drivel

Then later you said:

I think federalism is a failed experiment and I have no interest in re-litigating the Civil War.

So apparently, Federalism was a core part of the "experiment" of or Founding and not "middle school civics drivel".

> Federalism was a core part of the "experiment"

I didn't say Federalism wasn't a part of the experiment of the Founding. I'm addressing your historical revisionism about why the Federal system exists. It has more to do with political expediency in a climate where the states held all the cards than any deeply held belief that the Federal government should be as strong as possible.

Remember, the Framers didn't have a mandate to create a new Constitution, because the state legislatures were worried what that would do to their power. They created the Constitution they thought they could get away with.