Dan Mitchell: ‘The Fiscal Case For Federalism’

Source:Dan Mitchell being interviewed about federalism.

Source:The New Democrat

“Fixing entitlement programs is the the most pressing fiscal need in Washington.

In a discussion with the Club for Growth Foundation, I explain that we also need federalism – i.e., shifting programs to the state and local level.

Some of those activities should be left totally to the private sector (agriculture,

housing, etc) while others could be picked up by state and local governments (education, transportation, etc).

As I mentioned in the discussion, Switzerland is a good role model.

It’s arguably the world’s best-governed nation. And I don’t think it’s a coincidence that it’s also the most-decentralized nation.

which case everything is abolished).

National defense (a small share of spending)

Social Security (after being reformed, of course)

Medicare (after being reformed, of course)

My former colleague Chris Edwards wrote about the need for federalism in a column for National Review. Here are some highlights of his article… 

From Dan Mitchell

“Dan Mitchell Extolling the Virtues of Federalism” 

From Dan Mitchell

I have a few responses to what Dan Mitchell is advocating for here before I agree with a lot of what he’s saying, minus the flat tax. 

A lot of today’s so-called Progressives (who are actually Social Democrats or Democratic Socialists) argue that: “This is the way that they run health care in Sweden and the rest of Scandinavia. This is what we should do in America as well.” Meaning that health care, college education, and a lot of other social and economic benefits are run exclusively by the national government in those countries: “So we should do that in America as well.” 

Well, as lot of Conservatives, as well as Liberals, including myself and The New Democrat Blog will tell you, just because one thing might work in one country, doesn’t mean it will work in another. China has been a Communist State for almost 80 years now. That country seems to be thriving economically. Do you really want America to be a Communist State? And that’s just one example of why you don’t want to automatically assume that just because one system might work in one country, that another country should just automatically adopt that form of government as well. 

But that’s what Dan Mitchell is basically doing here. Switzerland is a country of 9 million people. Roughly the same population as the State of New Jersey. It has the same territory as New Hampshire and Vermont combined. America is a country of 330 million people. We are the 3rd largest country in the world in territory and in population. Just because something might work in New Jersey or Texas on a state level, doesn’t mean that would make for good policy nationally. And that’s really my case for federalism here. 

I think when people who aren’t familiar with the term federalism, especially people on the left who are always advocating for more Federal responsibility, power and programs, they think federalism means strong, national, government. That a Federalist wants a strong, national, government. But the fact is the opposite true.

Federalists believe in the Federal Republic. And in federal republics, of course you have a national government. But you also have state/provincial government’s as well. You don’t have the national government handling national defense, foreign policy, monetary policy, interstate law enforcement, along with education, social welfare, marriage, recreation, and everything else.

In federal republics, the states aren’t national agencies. They’re what U.S. Supreme Court Justice Louis Brandeis called: “Laboratories of democracy” And what that means is the Federal Republic is essentially a “free market of ideas”

And the states, as long as they’re within the U.S. Constitution and aren’t violating anyone’s constitutional rights, or are interfering with federal power, like trying to create their own military, or trying to run their own immigration policy, (that sort of thing) they are free to manage their own law enforcement agencies, they’re own education systems, they’re own social own welfare systems themselves. Without the Federal Government butting in and trying to interfere with their own government and trying to tell them what they can and can’t do. Or trying to take over their programs for them. 

So when you have a country as big, as diverse, not just racially and ethnically, or culturally, but politically as well, where you might have some states that look like Scandinavia ideologically, like Vermont, but have some states that look like Switzerland ideologically, like Texas, federalism which is decentralization of governmental power, is really the only form of government that I believe can work in America. And has worked in America for almost 248 years now.