As for more regulations making for better off citizens, that's absurd. Does that apply only to business, or regulation of personal choices as well?

It doesn't even have the virtue of being empirically demonstrable. If you define better off as something like the human development index, yes, Canada is better off, although the US is still ahead of most of Europe. It should also be noted that Canada, while more regulated than the US, is less regulated than Europe.

There is more of a correlation between small Western countries and prosperity than a correlation between regulation. YOu know what that proves? That decentralization, smaller units, are more efficient. Smaller countries like Finland, Sweden, Canada, and Switzerland have better government than larger nations like France, Germany, Britain, and the US, nations with more than 50 million people.

That's the best argument for a weak federal government and strong state governments that one can find.