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Ah, I see what you're getting at. I suppose to the purists, it's a problem. At a practical level, though, it's the most successful system for retarding the size and scope of government. Granted, we've expanded it heavily now but for the first 100 years or so it did a good job. Government is evil...

Why would federalism be a problem with Libertarians? There are issues that should be the sole purview of a locality, then the state, then lastly and only lastly the federal government.