The Civil War was in essence about State rights. We need to start there.
The idea is sound, but I would also stress that we need to come up with free market alternatives to defeat government run programs and entitlements. For example the Chicago School of Economics has suggested privatizing Social Security. It was implemented in Chile giving people an option between private SS funds and government run SS funds. It works with most people choosing private SS funds. Another point is we need to privatize parts of the government such as Amtrak and return certain departments back to the states, such as education.
Conservatives have plenty of other great ideas too. We need to talk about them, constantly.