Chris Edwards explains why the Cato Institute’s latest report links a cut in federal aid to restoration of responsible state government.
The federal government spends $750 billion a year on 1,386 different subsidy programs for state and local governments. The study describes 18 reasons why these programs should be eliminated.
Rather than being a positive feature of American federalism, the aid system undermines responsible and efficient governance. It encourages excessive and misallocated spending. It reduces accountability for failures while generating costly bureaucracy and regulations. Aid also stifles healthy policy diversity and undermines democratic control.
Furthermore, by imposing one-size-fits-all policies when there is no national consensus, the aid system divides society and increases political conflict.
