I think the only workable solution to the situation would be for the Federal Government to volunteer ;) to hand back almost all of its powers to groups of states, newly created, about the size of provinces in Canada.

For example, there is absolutely no good reason that I can think of to have 6 states in New England. These states could unite with the state of New York to become a new "province".

Similarly, Pennsylvania, New Jersey, Maryland, Deleware, Virginia and W. Virginia would unite and become a single province, as would Ohio, Indiana, Michigan and Kentucky. The Carolinas, Georgia and Florida another--Tennessee, Alabama, Mississippi, Louisiana and Arkansas, another, etc.

These new provinces would act "almost" like independent countries, and be allowed to create their own currencies. In this way, "free market" competition, scientific analysis and fiscal sobriety will determine which currencies survive and which fail, so everyone will have to pay attention to what's going on.

Taxation will have to be simple and transparent (probably "value added" or "net worth" based rather than income-based) and detailed auditing of the books of the provincial government will be the norm (no "off the record" accounting and other such tricks allowed, as a matter of law).

Most important, Corporations would be kept on a short leash--they would not have the same rights as persons, and their officers could be held partially accountable in case
bad management. The would not be allowed to deduct energy costs from their expenses before paying taxes and all "investment credit" and "depletion allowance" loopholes would be eliminated. They would not be allowed to "merge" with the competition when profits start to sag.

Each state could keep up to 1% of its citizens in the military as part of a "well-regulated militia". No troops from the provinces could be "Shanghai-d" by the federal government for foreign interventions, unless a 3/4 majority of the provinces allowed it, wherein, it would require a 2/3 vote of the provincial legislature. The states could abolish the phony war on drugs and reduce the size of the judiciary and penal budget.

The federal government would be funded by volunteer contributions from corporations and the rich in each province. Of course, it's duties and responsibilities will be greatly reduced--no education, commerce, human services, homeland security, interior, etc. The EPA would still exist, but its responsibilities would be expanded to include scientific information accumulation, dissemination and coordination of the effort to combat AGW.

HOG