Welcome To The United Welfare States Of America
The economy of free and the notion that "other people will pay!" have great allure.
Economist Veronique de Rugy writes in reason about the clamor for the Federal government to cover at least 90 percent -- and perhaps all -- of the cleanup and recovery costs from Sandy. This bellowing -- "Daaaadddy, helllp ussss!" -- came from New York Senator Chuck Schumer and Governor Andrew Cuomo and New Jersey governor Chris Christie:
"This was not a New York disaster, or a New Jersey disaster or a Connecticut disaster, but a national disaster, and FEMA and the federal government should be providing help to the region to the full extent they can," Schumer declared on November 1. "I will continue to push the feds to reimburse the city and state for the full costs of repair and recovery for all aspects of the disaster."These reflexive calls for Washington to pick up the tab underscore one of the greatest shifts of power in American politics during the last four decades: the transition from state and local autonomy to federal subsidy and control. This centralization of government was made possible largely by grants-in-aid, money provided by the federal government to state and local governments or private parties. They have become the third largest category in the federal budget, trailing only Social Security and national defense.
According to the Congressional Research Service, there were 1,724 of these grants in fiscal year 2011, paying for things such as bridges, teachers, Medicaid, farm subsidies, and abstinence programs. The total cost of these federal grants was $515 billion, up 160 percent in real terms since the beginning of the 1990s and nearly 60 percent since 2000.
...Federalizing first-responder programs accentuates the public choice problem that already plagues the political process. A congressman from Wyoming has no incentive to admit that his state is not a likely terrorist target; on the contrary, that would mean turning down "free" money, which almost no successful politician ever does. By contrast, when first-responder programs are the responsibility of cities, counties, and states, legislators have an incentive to more accurately assess risk and the potential benefits from additional spending.What is true for homeland security is also true for most other federal grants to the states, including anti-poverty spending. In fact, there is growing evidence that grants ostensibly aimed at helping the poor or boosting the economy are used by lawmakers as electoral currency to gain or reward constituent support. In a working paper, Vanderbilt University's John Hudak argues that the president and his subordinates strategically direct federal funding to electorally competitive states and that the executive branch delivers more money to swing states than all other states combined.
De Rugy gives Canada as an example of a wiser approach, where only 38 percent of spending is done at the national level compared to 71 percent here:
Far from hurting children, Canada's localized approach to education has correlated with test scores that are typically higher than those of American kids. Some provinces have made great strides in school choice and other innovations.This could happen in the United States too. The federal government should warn states that it is turning off the grant spigot and then do it. When bills come due for regular, predicable expenditures such as education, states and localities should figure out how to make ends meet. If states stop depending on the feds for bailouts and start saving for a rainy day, they will finally be ready for the next hurricane.
How much does New Jersey pay in taxes compared to the funds it receives from the federal gov't?
"Well, listen, it's fair to ask it but I have the answer," Christie said during the Oct. 30 interview. "The answer is that for New Jersey, which gives so much to this country -- by the way, 50th in return of our federal tax dollars."
http://www.politifact.com/new-jersey/statements/2012/nov/18/chris-christie/chris-christie-says-new-jersey-receives-smallest-r/
Jason S. at January 13, 2013 5:33 AM
It is probably this very form of bribery given to the states that has seen them abrogating their (the states) rights and responsibilities under the 10th Amendment.
Things are bound to get very heated, and quite interesting, once all this money flow to the states stops because the feds can't borrow any more to pay it without completely devaluing the dollar.
Azenogoth at January 13, 2013 6:41 AM
AZ gets alot more fed dollars then we pay, ofcourse most of the monet we get is spent putting out fires on FEDERAL lands which we dont make any money off of.
I'd like to see that map of fed cash by state weighted by removal of fed money spent on fed land
lujlp at January 13, 2013 7:09 AM
Jason S - I'm in NJ and WAS a Christie supporter; but, not any more. His behaviour since Sandy was turned me off - big time.
First there was his sucking up to Obama by giving him a photo-op tour, while telling Romney to go suck eggs.
Now there is the whole - "the feds owe us" nonsense.
Sorry, but most states do not (and whose says they should?) get back more than they give.
There are several towns near me that have had storm debris (mostly brush and other yard stuff) sitting on the curbs since the storm. The local towns are NOT cleaning any of it up. Instead the crap is sitting there while the local towns, counties, and the state wait for the feds to clean it up. Their reasoning is that those trees came down during Sandy so the feds should pay to clean it up. (BTW, my town did and paid for our own clean up, no waiting for the feds - thank God for a real Republican Mayor)
Christie has shown his true colors - he is nothing but a big, fat, RINO (and no, I am not refering to his weight - just his poor attitude)
This whole attitude just sickens me. And it isn't just Christie or Schumer (now there's a real ass), it does seem like it is so many folks all over this country. Amy's title of this post is spot on - welcome to the United States of WELFARE - everybody is holding out his hand expecting a handout. (and don't get me started on the bagle shop that has a tip jar! Amy already did a post on that)
Charles at January 13, 2013 7:47 AM
The whole equation is fucked by the 16th amendment.
If Bill Gates and Steve jobs had their headquarters in Arkansas and Kansas, what would the map look like? What if Wall Street was located in Florida?
If the states could levy the income taxes and pay or starve the federal government -- the system might actually work the way it is supposed to.
Jim P. at January 13, 2013 9:47 AM
Crid is suspiciously quiet....
wtf at January 13, 2013 9:48 AM
"It is probably this very form of bribery given to the states that has seen them abrogating their (the states) rights and responsibilities under the 10th Amendment."
Exactly. State governments have sold out. The federal government can levy any mandate on the states that it wants, and the states can't refuse because the result of doing so would be loss of federal funding. Remember the national 55 MPH speed limit? That was simply the result of NHTSA telling the states, "Do this, or else."
Cousin Dave at January 13, 2013 4:29 PM
This has been done on so many things, of course the DOT is the most visible. Additional examples are the .10 and .08 DUI limits. The seat belt laws.
But others that are in place is most of the war on drugs via LEO funding and the No Child Left Behind via the Dept of Ed funding for primary schools.
If they had done the 16th amendment that they could only levy taxes on the states, and the individual state was paying the money, we wouldn't have the federal leviathan that we have now.
Jim P. at January 13, 2013 4:51 PM
Yeah, and that sort of thing will get worse over the next few years as a bunch of states come to Washington, hat in hand, to ask for their state employee pension funds to be bailed out. My hope is the Congress will say no to them, but I'm not counting on that.
Cousin Dave at January 14, 2013 6:42 AM
Charles,
Yes, I can see what you mean about what happened after Sandy.
Christie *did* stand up to the construction and teacher unions which took some political guts, I guess.
I'll bet you a million bucks that Romney would've made the same photo op with Christie if he was president during Sandy. Republicans and Democrats seem to be the same creature. They'll say one thing during campaigns and speeches and do something different when it comes to the actions, as far as I can tell.
But reading the article from Reason that blog hostess Amy linked to, it does make you wonder if these grant-in-aid programs are really the most efficient use of resources.
If it's true that they are the "third largest category in the federal budget, trailing only Social Security and national defense", then that's sobering. I can see where states would become addicted to these funds.
Jason S. at January 14, 2013 1:22 PM
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