Federalism, a defining force in American politics, is a system of government where two or more governments share authority over the same territory. This is just the case in the United States where our national government shares power with each state to govern its citizens. Today there exists a cooperative federalist system in which its primary features include the sharing of functions between state and national governments along with exclusive powers for each as well. By sharing powers there exists a boundary to the excessiveness in which both states and the national government can exercise their power.
With the shear size and diversity that is the United States it is easy to see that one single authority would not be feasible. For all voices to be heard, there needs to be an authority for the concerns of citizens that share a common area. This is where the states come into play. The constitution places all power not reserved for the federal government to be for the states in the 10th amendment. These include such powers as controlling roads, sanitation, and education (although the federal government does have some influence in education through aid for the most part it's up to the states to decide).
Although composed of officials from the different states, the national government as an entity will also try to place influence upon the individual states through inducement and mandates. I thin this is a very significant factor in the way the national government can increase its power because the government almost seems to blackmail the states with federal money. Since the national government collects taxes from all the states, each state wants a part of that money, at the same time however, the states usually want to conduct matters of their concern on their own. This is where the national government makes it move by offering grants and aid to the states, at the same time they demand the states to follow certain policy if they are to receive that money. So if New York wanted some additional funds to improve its highways and turn to the national government, they will have to do it the government's way or deal with having to increase taxes upon its own citizens, an option most states would not want to take.
The shifting of the balance of power to the extreme of state autonomy or national power hurts all citizens. I agree with John Donahue that if states have too much control there can be a tragedy of the commons and from my previous examples someone benefits while another hurts and a unified progress for all states. At the same time too much national government can restrict the liberty of its citizens through too much regulation and control. The happy medium in this whole mess is the constitution. But with this the social, political, and institutional factors of the present time contribute to preventing th
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