From my perspective the problem with water in the US is that no one is charged for the actual water. You are only charged for the processing costs. This means that the market never acts to regulate how much water you use. People will use less water if it costs them more.

However, changing to a market system for water would never happen overnight. People are not used to paying for water and cannot move on a dime. However, long term I think it is our only solution. The midwest, who many on HN seem to have a bad impression of, has the world's largest fresh water reserve in the world (the great lakes). Meanwhile, the plain states and California will have continuing water difficulties moving forward. Long term, people are going to need to move to where there is abundant water. It is not sustainable for so many people to live in marginal areas.

One way to encourage people to move is by having market forces act. If the price of water is cheaper in the great lakes region there will be a slow but steady migration there over time. This will in turn ease the brewing crisis in the west. This isn't the only action which should be taken but we should consider (from a policy perspective) the idea of allowing market forces to act in the water market.