There is much talk about the recent Arizona law on illegal immigration.  But I think it is a proxy for deeper issues about the legitimacy . . . and even the tenability . . . of our Federal system.
While crime on the Border itself is flat (http://www.dailykos.com/story/2010/5/2/862771/-AZ-Republic-says-its-NOT-about-the-borders citing http://www.azcentral.com/arizonarepublic/news/articles/2010/05/02/20100502arizona-border-violence-mexico.html), crime in other parts of Arizona rises, often with ties to Mexico (http://www.msnbc.msn.com/id/22614102/).  As Peggy Noonan writes in the Wall Street Journal:
     In New York, legal and illegal immigrants keep the city running: They work hard jobs
     with brutal hours, rip off no one on Wall Street, and do not crash the economy. They
     are generally considered among the good guys. I’m not sure New Yorkers can fairly
     judge the situation in Arizona, nor Arizonans the situation in New  York.
Yeah, it is about the Border, Daily Kos to the contrary and, yeah, it is increasingly about a Federal government that seems overbroad and ineffective.  Arizona’s response is ham-handed, excessive and, likely (especially before recent amendments) unconstitutional.  But the concern is real and justified (if over-stated), the product of a Mexican . . . and a US . . . government that seem unwilling or unable to govern.
In 1944, Fredric Hayek wrote the very well regarded book, The Road to Serfdom, which stated that centralized systems lead to people losing their liberty, in part because central authority has no access to (and cannot correctly evaluate, due to its frame of reference) local information, part of Peggy Noonan’s point. 
However, historically, the actual “road to serfdom” started with the collapse of efficient Roman central authority in the West and the East along with the allocation of power and responsibility to local leaders (Dux Belli, “War Leaders” later “Dukes’) and laws that bound people to the land to increase local agricultural productivity as a result of declining trade during and in the aftermath of the Crisis of the Third Century.
From the time of the assassination of Alexander Severus to the rise of Diocletian, Rome suffered a crisis of legitimacy so severe that parts of Rome, in the West, the Gallic Empire in Spain, Gaul and Britain, and in the East, the Palmyrene Empire in Syria, parts of Egypt and the Levant, were ruled by successor states, 
Even following the restoration of central authority started by Aurelian and completed by Diocletian, the Imperial authority was broken up, with an Augustus and a subordinate Caser ruling both in the East and in the West.  City dwellers, swarming into the countryside for food and protection during these unstable times, became a new class of second-class citizen called coloni, who later were bound to the land.  The pattern for the Middle Ages, especially in the West, was set. 
While it is not the Palmyrene Empire, what Arizona is doing is an assertion of powers reserved to the Federal government: setting immigration and naturalization policy, in other words “defending the Border.”  It is worth noting that this was exactly what the Palmyrenes did: defending Rome’s limes parthanicus against the Sassanid Persians when Roman central authority could not.
If the several states do not trust the Federal government to carry out its enumerated powers under Article I, Section 8 of the Constitution, why should they continue to support it, especially where, as with Arizona, they can take on the neglected function?  Would this not be especially true where there is a wide-spread perception that the Federal government creates too great a tax burden and acts too often in an ultra vires manner, as with the recent (and unpopular) Health Care Reform initiative? 
This is Russian social scientist, Igor Panarin’s, point when he predicts a break-up of the United States (http://online.wsj.com/article/SB123051100709638419.html).  This is essentially how the Soviet Union broke up, per thinker John Robb: people realized that there was no penalty for non-compliance and people decided that it was much more pleasant and lucrative to be a junior vice president of  Gazprom than an assistant commissar with Ministry of Gas Industry of the Soviet Union.
The recent National Association of Business Economists report of the effectiveness (or, more correctly, lack of effectiveness) of the Stimulus Plan (http://money.cnn.com/2010/04/26/news/economy/NABE_survey/) is further fuel for the bonfire of the legitimacy of Federal authority.  Despite its ruinous cost and dubious Constitutional legitimacy, the Federal Stimulus Plan (enacted in the face of bi-partisan opposition) has been amazingly ineffective. 
Why should states continue to support this rent seeking, bureaucratic, Federal monolith?
It is entirely possible that the several states may well follow Arizona’s lead.  Instead of formal nullification, simply ignoring the laws passed by the Federal Congress may prove more effective and less controversial.  This could be a state version of Andrew Jackson’s “John Marshall made his decision, now let him enforce it.”  The risk, of course, is that Federal authorities may enforce their laws as Aurelian did against the Palmyrenes: by force.  
However, the simplest and most constitutionally legitimate course of action, the one that is true to our Constitution and traditions, is this: let us elect men and women to Congress and the Statehouses in November who respect the ideal of limited government; understand the power of the power of free markets, free men and free pulpits; and who embrace Federalism.
Let us elect men and women who understand the following:

  1. If the 20th Century, from Lochner, through Griswald to Roe v. Wade, was the century of the Civil War Amendments, the 21st should be the Century of the Tenth Amendment.

     2.     The great, looming realities of the 21st Century are: 1) we will have to compete for foreign capital with everyone else; and 2) we will have a less affluent population and a slower rate of growth.

     3.     These two constraints mean: 1) we will have to have to allocate a lower percentage of our GDP to government to attract investment; and 2) we will probably have a shrinking tax base in any event.

    4.       There will, however, be needs that will have to be met and investment rarely comes to unstable nation-states or to those without a properly educated work force.

    5.        The key to dealing with items 3 and 4 above is the Tenth Amendment.

    6.       The Federal Government needs to shrink, performing only its Constitutionally enumerated powers, as Madison believed it should.

     7.        Things like Education, properly a State (or, better, a local) function, would be returned to that level and the Federal Education Department could be eliminated.

      8.       Universal health care could be pursued through legal reform and the establishment of not-for-profit buying cooperatives.  Instead of creating a centralized government bureaucracy like the Post Office or DMV (or continuing the current employment-based system), Americans should get their health insurance through competing not-for-profit groups like USAA.

       9.     If this proves successful, Social Security and private pensions could be privatized (or in the case of private, employment-based Plans, reorganized) on a similar model.

      10.    National defense is a (perhaps “the”) critical function of government but it does not require continuing to buy weapons for the Cold War.  More money, time and effort need to be given to State and USAID.  The Department of Defense needs to think, not only about the current war(s), but the next.  This would best be done through investing in the development and honing of the Military’s current stable of exceptionally experienced Officers and NCOs.  Why not try to make them all McMasters and Nagles

       11.   The Troop Program Units (“TPUs”) of the Army and Air Force Reservesshould be reassigned to the states.  State National Guards and Militia ought to be capable enough to handle a disaster at the Hurricane Katrina level on their own.  If these forces are deployed in Federal service, there should be Inter-state compacts that handle the issue.  As a result, FEMA should be stood-down, saving money and decentralizing disaster response and recovery, maximizing local knowledge and ties.   

     12.   Returning Education to the States and allowing individuals to come together to solve common problems though voluntary organizations is not only more efficient, it is more resilient, an issue identified by thinkers as diverse as Ramo and Robb and Kuntsler.  

In a world of “Black Swans” it is wise not to put all your eggs in one Federal basket.