One of my favorite methods of auto-flagellation is to follow the US political system. From this act I'm starting to gather that there appears to be a run-up to an election and one of the themes is that the US government needs to be cut in size and more economic power handed over to the individual states. The ones pushing the hardest for this is the Republican party in general and the Libertarians in particular. Apparently, cutting the size of government is the panacea to all social issues.
I don't immediately buy this argument, in fact, I actually have sincere doubts about its validity. The US is a large federal state made up of many cooperating member states. When signing up to be part of the US, states agree to a number of things, i.e. to share a common external border, allow free flow of goods, services, capital, and people, and accept the dollar as the currency.
Within such a construct, what can happen if the role of the federal government is reduced? Well, it's difficult to say, economics isn't really an experimental science. However, it is a comparable science. So, let me think. Is there anything which has some of the characteristics of the US..? Hmm.. It's a tricky question..
Oh wait! There's this thing called the EU! It's made up of many member states, has a shared external border, a customs union, allows for the four freedoms, and it even has its own currency. In addition, the EU budget is tiny , only around 5% the size of the US federal budget; Surely, this must be a true Libertarian paradise. It's a good thing that one of the lessons learned the hard way these days is that having a monetary union without a fiscal union does not cause major economic headaches.
Oh wait.. That's exactly the lesson being learnt these days. The EU is pushing hard for closer fiscal cooperation. It's been found to be near impossible to have a monetary union - a single currency and a single central bank - without also having extremely strong and complex regulation of member states fiscal responsibilities or a larger common budget.
So seeing as this story should have been reported in the press (even in the US) I'm really starting to doubt that Republicans and Libertarians read newspapers.. Or perhaps, just like many Europeans want a United States of Europe, perhaps these people want an American Union. :p