The federal government creates state aid programs because it wants the states to increase spending on activities that federal policymakers think are important.
In a major 1981 study, the ACIR concluded that the "Robin Hood principle of fiscal redistribution-'take from the rich, give to the poor'-has always received much more lip service than actual use in aid distribution. Federal grant-in-aid dollars are commonly dispersed broadly among states and localities, including the relatively rich and poor alike."47 And the ACIR reiterated, "The record indicates that federal aid programs have never consistently transferred income to the poorest jurisdictions or individuals."48.
More recently, the Government Accountability Office said, "The federal grant system continues to be highly fragmented, potentially resulting in a high degree of duplication and overlap among federal programs."76 The auditing agency, for example, identified 80 federal aid programs that provide funding for local economic development.
Federalism expert Adam Freedman notes, "When states are in charge, policy mistakes are localized," but "When the federal government is in charge, all mistakes are Big Mistakes."152 By contrast, he writes, with decentralization, "The failures stay local while the successes go national," as states freely copy good ideas from other states.
Budget expert James Capretta noted that "Medicaid's current federal-state design also undermines political accountability. Neither the federal government nor the states are fully in charge. As a result, each side has tended to blame the other for the program's shortcomings, and neither believes it has sufficient power to unilaterally impose effective reforms."193 He concludes that "The fundamental problem in Medicaid is that neither the federal government nor the states are fully in charge."194.
The federal government began handing out aid to government-owned airports during the New Deal, and then the Airport Act of 1946 began regular federal aid funding of government-owned airports.
Federal aid for government infrastructure, combined with the tax-free status of government bonds, has created a strong bias in favor of government ownership.
https://www.cato.org/publications/policy-analysis/restoring-responsible-government-cutting-federal-aid-states
In a major 1981 study, the ACIR concluded that the "Robin Hood principle of fiscal redistribution-'take from the rich, give to the poor'-has always received much more lip service than actual use in aid distribution. Federal grant-in-aid dollars are commonly dispersed broadly among states and localities, including the relatively rich and poor alike."47 And the ACIR reiterated, "The record indicates that federal aid programs have never consistently transferred income to the poorest jurisdictions or individuals."48.
More recently, the Government Accountability Office said, "The federal grant system continues to be highly fragmented, potentially resulting in a high degree of duplication and overlap among federal programs."76 The auditing agency, for example, identified 80 federal aid programs that provide funding for local economic development.
Federalism expert Adam Freedman notes, "When states are in charge, policy mistakes are localized," but "When the federal government is in charge, all mistakes are Big Mistakes."152 By contrast, he writes, with decentralization, "The failures stay local while the successes go national," as states freely copy good ideas from other states.
Budget expert James Capretta noted that "Medicaid's current federal-state design also undermines political accountability. Neither the federal government nor the states are fully in charge. As a result, each side has tended to blame the other for the program's shortcomings, and neither believes it has sufficient power to unilaterally impose effective reforms."193 He concludes that "The fundamental problem in Medicaid is that neither the federal government nor the states are fully in charge."194.
The federal government began handing out aid to government-owned airports during the New Deal, and then the Airport Act of 1946 began regular federal aid funding of government-owned airports.
Federal aid for government infrastructure, combined with the tax-free status of government bonds, has created a strong bias in favor of government ownership.
https://www.cato.org/publications/policy-analysis/restoring-responsible-government-cutting-federal-aid-states
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