National government domestic policies
State government policies
Local government policies
I hadn't ever really thought about it before today, but I am kind of shocked that the local level has the fewest responsibilities. Of course this Wikipedia list is not comprehensive, and some responsibilities, like currency and intellectual property rights make much more sense to be as general and centralized as possible. But I think a compelling tactic to correct the United States budget deficit is to review the responsibilities of the federal government, determine what tasks would make more sense to be done locally and move those tasks from the federal level of government to the local level of government, with the states doing the same thing as the federal government.
People are often expressing concern with alleged "government takeovers"; the government should lose as many duties as it can, pushing them as far down the division of power as possible. Let's use the far-reaching government for things like civil rights protections. Let's use the local level of government for things like business regulation, trade restrictions, immigration policy. States can fill in the gaps on either end.
Why have levels of government if we're going to depend on the most abstracted level for everything? We might as well have a parliamentary monarchy at that point.