Shrinking the size and authority of the government sounds great in the light of disincentivizing certain behaviors, but I believe you're applying game mechanics

Shrinking the size and authority of the government sounds great in the light of disincentivizing certain behaviors, but I believe you're applying game mechanics prematurely here. I (liberals in general mostly) actually don't WANT a smaller government, I want a better regulated one that in many cases has MORE power (ie: banking regulation). The solution is not to join the Tea Party and tear down the federal government, it's to fix the government by providing a better feedback mechanism, and restore the regulations that Regan etc. destroyed. Governance at local levels sounds great, but unfortunately there are things that need to be regulated federally. Perhaps a compromise we can agree on is that the separation of authority is where the core issue lies, and some of that authority certainly needs to be pushed down to the local level, but some certainly needs federal regulation (again, Finance, lookin at you).