Federalism is the philosophy that the federal government and state governments have shared powers, and unique powers delegated to each. This is why we have the Tenth Amendment in the Constitution of the United States. Certain roles are meant to be taken on by the federal government, and the areas that the federal government is not supposed to manage, the state and local governments are.
Federalism was the prevailing ideology in early America, it led to the ratification the Constitution, and founded the fabric for the modern American economy and infrastructure system. The fiscal goals of Federalism we're to alleviate the burdensome debt accrued by the states during the American Revolution, and fiscal conservatism is a major principle in the Federalist ideology. Not because federalism argues for less revenues and less spending, but because the federalist realizes that wasteful spending, deficit spending, and becoming a debtor are undesirable economics and will eventually lead to the surrendering of one's own freedom.
While being fiscally conservative, in terms of deficits and debt, federalism believes in national spending to create an infrastructure system that links the nation together and allows for the easy transport of goods and services. Federalism believes that spending money to encourage economic development, enhance social mobility, and enhance one's ability to compete in a capitalist system are desirable and must occur if a country is able to succeed. Simply put, federalist spending policies encourage investment in America because it will benefit America's longterm health, longevity, and future.
Federalism believes that the Constitution is the supreme law of the land, and that the Supreme Court should not act as oligarchs that legislate from the bench, but ensure that the Congress and the Presidency do not step from their roles and bounds. Liberty is lost when the Constitution is tossed to side of the street and trampled on by greedy special interest groups, individuals, and politicians. Contrary to libertarianism, federalists believe the best way to achieve and defend liberty is through a strong central government that can enforce the laws of the Constitution. This was the principle debate between Hamilton and Jefferson, which was more suitable in promoting liberty... federalist policies, or limited government policies. Hamilton's ideas are long dead, and Jefferson is prevailing in the modern discourse, but do not confuse Hamilton's principles as big-government liberalism. The policies of Franklin Roosevelt and the modern progressive movement do not care about the health of the US Constitution, nor do they care about economic freedom, prosperity, or property rights.
Federalism was the original ideology behind American Conservatism. It was espoused by the Federalist Party, America's first conservative party that built the country from the bottom up, and ensured America would become a strong industrialized and modern state, whereas Jefferson wanted a small, limited, progressive, and agrarian nation. Federalism was later espoused by the Whig Party, then the Republican Party. Federalism became the backbone of Republican politics and the conservative ideology form 1860-1932, and federalism is the chief reason for America's rapid urbanization, modernization, industrialization, surpassing the United Kingdom for the highest standard of living in the world, and creating the largest economy the world has ever seen. Federalism was dominant among conservatives and the Republican Party until the late 1960s, when the party started to transform into a Jeffersonian movement. Federalism needs to be repackaged, rebranded, and restored if this country is going to move forward, and if the conservative movement is too survive. Federalism, not liberalism, not left-wing progressivism, nor "Jeffersonian conservatism" (e.g. minimalist government) is responsible for the creation of the United States and the emergence of thirteen agrarian colonies into the world's foremost superpower, and if the United States does not re-embrace the ideology that built this great nation, it will fade like Rome into the scrapbooks of history.