Even in the absolute best case scenario where this just works, the bare minimum retaliation is withholding of federal funds, and I guarantee you any state or state populace in that scenario will blink first.
Blue states fund red states, they are the economic engines of the country. California has the forth largest economy in the world. The federal government has more to lose. Red states are poor. Blue states can simply withhold federal support, keep federal tax revenue in state and let the federal government try to sue for it.
I encourage the federal government to try to support itself off of red states.
I understand that, but you're assuming they also stop paying federal tax altogether? Your initial point was to just not allow federal employees to transact, but now we're quickly entering secession territory. The red states mostly grow the food, anyway. Is Manhattan prepared to starve? Feds may block imports to such a rogue state.
If your point is that states should essentially secede to prevent federal agents from doing anything within, that's possible, but I don't think most citizens of even the bluest state want to secede.
> The major power lever that could be used in soft secession is if a state normally giving more in taxes to the federal government than it receives back would cease to send tax revenue to the federal government. These states, which generally are blue states governed by a Democratic Party majority, could leverage finances to exert influence over the federal administration, i.e. a Republican administration seen as hostile to their interests.
Interestingly, if done strategically, you could cause the US government to default on treasuries through a loss of federal revenue (a component of which is used to service US debt), forcing a debt spiral. This would enable the states with economic power to "wag the dog" in partnership with the bond market, because the federal government cannot operate if they lose the power of funding via issuing debt while also losing revenue from these states. Net contributor states could issue muni debt directly into the bond market, avoiding the need for federal dollars.
Blue states can force the federal government into default, if they have the will.
