Conservative columnist George Will wrote in today’s Boston Herald about the massive fiscal problems in the State of Illinois and cautioned against a bailout by the federal government. Instead, he argued that the restraining influence of federalism means the fiscally imprudent States facing bankruptcy (such as Illinois, California, and Rhode Island) must face the harsh discipline of the open markets, in this case, the bond market for State of Illinois debt.
The pressure for a federal government bailout of the most profligate States is not going to abate. Often, the States with the worst finances are among the most populous, so they have commensurate influence in the halls of Congress. An interesting argument could be made that it is actually the combination of suburban and central city voters in and around the largest and wealthiest cities which are bankrupting the State governments. Then how to stop the profligate spenders in the large cities from bankrupting the entire federal system of State governments?
Why not create more restraining federalism by creating more States? In the act of creating more federalism to check the financial irresponsibility by a few but very populous States, divide the worst-offending large population States into two parts: one new State that is largely rural and less wealthy, and the existing State organized around the wealthier yet profligate population centers.
Thus, Nevada becomes two States, southern and northern. The much smaller, wealthier, but more populous southern portion around Las Vegas would still be named ‘Nevada,’ while the much larger, less wealthy and less populous northern portion could be called, ‘Sierra.’ Smaller, wealthier but more populous northern Illinois around Chicago would still be ‘Illinois,’ while the larger, less populous and less wealthy southern portion might call themselves, ‘Lincoln.’ Tiny Rhode Island is never going to be divided, but the West Coast States of California, Oregon, and Washington could be divided by the north-south mountain ranges that already divide their states into wealthier populous cities in the coastal areas (the roll call of prosperous coastal cities includes Seattle, San Francisco, San Jose, Santa Barbara, Los Angeles and San Diego) and less wealthy, less populous interiors.
The coastal area of California would still be the State of California from the City of Redwood down to the City of San Diego, but why not have the lee side of the coastal mountains called the State of Inland? State of Oregon and State of Trail? State of Washington and State of Cascades?
This strategy might leave New Jersey and Texas and Florida intact, but why not the smaller and wealthier southern State of New York around New York City and the larger, less prosperous, northern State of Hudson? Or the Philadelphia to Pittsburgh corridor as Pennsylvania and call the new State in the western portion, Allegheny. The potential total is seven new States with fourteen new Senators and no mega-city, all carved from more rural yet less wealthy areas of the parent State. The political theory of federalism suggests that all seven new rural States, as a natural function of their less prosperous condition, would be much more financially prudent than their wealthier and more populous parents.
When there are calls for the federal government to bailout any of the wealthy yet financially irresponsible States, then have any federal bailout simply buy the State’s bond debts only after it divides. In Illinois, this increased federalism would give wealthier suburban and urban Chicago voters their own State, and all the rest of the less prosperous citizens of Illinois would no longer have to pay for the City of Chicago’s unwillingness to live within its means.