When we say "big government is the problem," should we really say "federal goverment is the problem"?

Congress is given the job of regulating interstate commerce. However, much of the time this regulation ends up creating a lot of local problems as municipal business regulations can be deemed preempted by Congressionally enacted federal regulations.

Municipalities, as well, may be the best groups to determine how to invigorate their economies, as they are much closer connected to their constituencies, and therefore more accountable. They may also be able to best determine how to ensure revenues are kept in the community to fuel growth there.

Finally, the big problem with big government is that it doesn’t compete with anyone. Municipalities, however, if viewed as more self-regulatory places, may actually create “government” competition as locals aren’t prevented as much from simply going to another provider – i.e., moving. By removing their tax dollars, they vote with them. The government is required to respond. This may influence government in moving at pace with markets – which is the problem with regulations.

So, should we be focusing as much on how municipalities need to be given more stake in regulation, and the responsibility of the federal government should be less about “governing” and more about “supervising”, at most?