This is going to be a random daydream sort of post. It beats watching Super Bowl pregame or doing pointless snow-shoveling (you loaded 16 tons, what do you get? Another day older and deeper in debt).

I want the U.S. to return to Federalism. But some of our states are too large–California has a higher population than any of the non-U.S. countries that are in the top 10 of the economic freedom index. And some states are too small. Finally, some cities are ridiculously large, but they are not easy to break up. So here is my proposal:1. Turn any area of 500,000 or more people within an area of 100 square miles or less into a city-state. City-states would be autonomous, other than their participation in the United States as a whole. Note that New York City would be too large an area. Manhattan would be a city-state by itself. So would Brooklyn. Los Angeles and Chicago would be broken up as well. On the other hand, Indianapolis and Columbus are too spread out to be city-states by this definition. My guess is that we would end up with about twenty city-states, including the multiple ones carved out of New York, Los Angeles, and Chicago. Once the initial set of city-states is determined, it does not need to be changed. There is no reason to suddenly create a city-state out of a city that just crossed the 500,000 person threshold.

Each city-state should be governed by a single elected individual, whose powers are limited by a Constitution, but who rules until death, resignation, or loss of a recall election. Recall elections will be held when, say, 5 percent of the eligible voters in the city sign a recall petition. If a governor loses a recall election, a new election for governor is held 30 days later. One need not reside in the city-state to run for governor, although presumably once elected governor one would choose to live there.

My thinking is that a legislative branch does not necessarily help in a city-state. They can be pressured by interest groups, especially public employee unions. Instead, a wise, benevolent governor is what you want. With about twenty city-states to observe, citizens can get a pretty decent idea of who is wise and benevolent and who is not.

2. Next, we want to create county-states. These would cover larger areas than city-states, and they would be governed the way states are today, with elected legislatures and governors. County-states would range in population from 500,000 people to 10 million people.

a. Of the remaining counties, turn any county with 500,000 or more people into a county-state. If there are many small counties adjacent to one another but not near a large county, then merge the small counties together.

b. Merge each county with a population under 500,000 with the adjacent larger county,. If there is more than one adjacent larger county, come up with some mechanism to pick the merger partner–it could be done by election, or by a judge. Any mechanism will do. The result of the mergers will be county-states with populations of at least 500,000 each.

c. Once we have the county-states, any two adjacent county-states with fewer than 5 million people have the option to merge with one another, based on a majority vote in both county-states. So, Montana could merge with Idaho, if both states wanted a merger. Actually, the optional merger concept is not necessary for this scheme. I am more focused on getting rid of polities that are too big, as opposed to worrying about polities that might be too small.

d. County-states would be governed as states are today, with elected legislatures and governors. My thinking is that because county-states would occupy large areas, it would be very difficult for unsatisfied people to move from county-states. Therefore, they should have more voice in their government than people who live inside city-states.

Note that county-states could choose to be highly decentralized. I do not mean to force the small counties of New Jersey to lose their autonomy. I just mean that the government of the state of New Jersey could be broken into between two and ten county-states.

3. Government responsibilities.

The central government would be responsible for national defense and for maintaining a sound currency. It would have no other responsibilities. The city-states and county-states would be state governments. Apart from national defense, each state government would have as much responsibility as Denmark. It would run its own Social Security system, its own health care system, and so on.

One issue concerns what happens when people move from one state to another I would propose giving people the option to choose whatever Social Security system or health care system they want, regardless of where they live. However, if you change your mind and want to pick a different system, you may have to pay an exit fee to the old system or an entrance fee to the new system. A court or bureaucracy would have to be set up to determine exit and entrance fees that are fair.

Another issue is that of regional overlaps of concern. For example, roads and other forms of transportation infrastructure may cut across states. This would require negotiation among states, just as it does now. However, because there would be more, smaller states, with more responsibility, there would be more need to negotiate. If this becomes a problem, it might be necessary for states to agree to submit disputes to a binding arbitration board of some sort.

I envision this system looking like the European Union, but with no Eurocrats, a more common language, and more individual mobility across states.