Repubs do well when they aim for the senate

 That is where the small states are, and that is the law, someone represents small states, let us call them repubs, and that's the Law, to repeat one more time. There is no philosophizing the Law, the sheriff makes his tax dollar enforcing the Law.

Repubs should acknowledge the role, they should cultivate smart small state governors, they should support revenue sharing by state, they should be the senate, it is the Law.  Philosopher presidents foul this up every time. 

The Executive cannot skirt this Law. The executive philosopher drives the earmark process, but the Law remains, the senate represents small states, it's the Law for any foreseeable future. The philosopher president simply drives volatility when cash works much better then earmarks in following the Law.

Otherwise the trade book is an inventory list of earmarks, maintained by Nancy, that is her liquidity. That book is a thousand pages, folks. We want to boil that down to a twenty page accounting notice of the negotiated cash swap, ratio an amount. Then we can bet whether the Treasury tax will go up or down a bit in adjustment. Then we can bet our S/Ls. The S/Ls get the unbiased market, hedges have been removed from the Fed.

Treasury tax has a minimum

Based on our experience with the place in the recent past. We know the ex ante uncertainty expense is positive. We expect to pay the inflation tax at opportune moments by hedging it. But the losses are smaller, relative to the Law.   The Law is a hard bound, so relative to that bound, revenue sharing minimizes the dead weight cost. The dead weight cost are the induced interaction error between state capitals and their districts, mostly. All of these small state earmarks and dense district bailouts have behind them intra state illiquidity. We want that segmented from the Swamp, and thus run the liquid sharing fund.

Why an inflation tax?

It is the unavoidable Law, it is no one's fault there is no fair way to cost it out. This means the equvalent of value added tax, anyone using the tax dollar has to allocate for government losses. A two percent tax for Constitutional rigidity. Seems fair to me. But this is finite and renewable. That is a whole lot of difference, and it can thus be hedged in fair markets. No arbitrage cash swaps mean about a one percent productivity gain over the 15 years. That bare bones accounting efficiency gets us back half the tax.

This is centralizing, as they say. The continuing force is to push all states to get in an algebra with a natural ratio of state to district swaps. Small states expand in population, not necessarily Pareto optimum, but better than otherwise given the Law. The large state districts will know that a mid term adjustment is coming within state. That gets them buy until the sharing market opens in the Swamp.