We give up. You win. From now on, we’ll treat the animating ideal on which the United States was founded—out of many, one—as dead and buried. Federalism, true federalism, which you have vilified for the past century, is officially over, at least in spirit. You want to organize the nation around your cherished principle of states’ rights—the idea that pretty much everything except the U.S. military and paper currency and the national anthem should be decided at the local level? Fine. We won’t formally secede, in the Civil War sense of the word. We’ll still be a part of the United States, at least on paper. But we’ll turn our back on the federal government in every way we can, just like you’ve been urging everyone to do for years, and devote our hard-earned resources to building up our own cities and states. We’ll turn Blue America into a world-class incubator for progressive programs and policies, a laboratory for a guaranteed income and a high-speed public rail system and free public universities. We’ll focus on getting our own house in order, while yours falls into disrepair and ruin.That's fantastic. In return, let's cut Federal taxes to the bone so that it has the money it needs to take care of the military and its other few explicitly Constitutional functions. That'll leave more money for blue states to redirect to all those local projects.
Frankly, I think much of that spending done in Red States is harmful anyway. The opioid epidemic is paid for by Federal welfare money: poor people can't afford all those pills. However, they get food stamp money that can launder, and they get subsidized pills thanks to Federal medical aid. So ending all those transfer payments would ultimately be of benefit to our society: the transfer payments and welfare schemes often cause harm, however much they are intended to do good. Likewise, I don't worry too much that industry will flock only to blue states (with their high state taxes) and avoid red states (with their far lower ones).
This is what I think of as "true" Federalism -- the Federal government has a few, specific, explicitly stated duties. It has all, but only, the powers it needs to do those few things. Everything else is reserved to the states, or to the people, as the 10th Amendment plainly says.
So by all means, let's get to work on this new idea of theirs.