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The biggest benefit of federalism is that it creates 2 layers of protection. You have a central government, that functions to keep the country working as a unit, but also works to keep the states from encroaching on individuals and becoming too intrusive. The same works for states. The states have a LOT of control over what their citizens should be subject to, for example, criminal laws, property laws, contract laws, etc. are decided by the state, not the federal government and they aren't allowed to govern those areas. The states keep the feds from encroaching in that manner.

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