I found this post by Jason Sorens at RealClearPolicy quietly reassuring, footnoting as it does the intuitions I’ve frequently expressed here about the effect of federal money on the states:
Americans have long debated the proper role of the central government, and for good reason: Today, state and local governments receive between a fifth and a third of all their revenue from the federal government. As I argue in a new paper, the evidence suggests that intergovernmental transfers like these can adversely affect the total level of government spending, government debt, the tax burden, government efficiency, public knowledge about government, and economic growth.
[…]
Yet the bigger problem with grants may be that they empower state governments and loosen their accountability to their own voters. Windfalls of federal money arrive even if state residents don’t think the programs funded this way are a good investment, and such grants are an attractive target for voracious interest groups. By contrast, when states have to get revenue from their own taxpayers, they have to pay attention when workers and businesses leave because of shoddy public services or excessive tax burdens. Fiscal competition makes governments more efficient.
The long term effect of federal grants is to increase state and local tax burdens:
Economists Russell Sobel and George Crowley find that federal transfers “ratchet up” state tax burdens in the long run, because states decide to keep funding programs even after federal grants decline. If they’re right, states that expanded Medicaid will eventually face higher tax burdens when federal funding declines.
The grants are not spent effectively enough:
University of Pennsylvania economist Robert Inman (working from numbers developed by Brown University’s Brian Knight) estimated that 40 cents out of every dollar spent in federal highway grants is deadweight loss, or waste.
There may be a causal effect between the nationalization of programs and a detached, poorly informed electorate:
A study of Spain looked at regions that had taken different approaches to decentralization; in areas where governments had to fund their own programs from their own revenues, voters became more informed about the division of program responsibilities between governments.”
The country most like us, Canada, has been moving in the opposite direction:
Our neighbor to the north, Canada, provides an example of partially successful reform. There, the federal government has allowed provinces to reclaim “tax points” by reducing federal income taxes — in other words, federal taxes decrease by a certain percentage, and provincial taxes increase by an equivalent amount — so that provinces may fund health and social programs as they desire.
You don’t need to hate government to think that centralizing decision-making and power is a bad idea.
Dave:
I can smoke pot legally in CA. If I take it to TX I can be arrested. Women can get abortions in MA, not so much in SD, and if SD had its way, women could be arrested and jailed for doing in one state what is legal in another. On the flip side, a guy from TX who went swaggering around Oakland with a pistol on his hip would have his choice of executioner: gangster or cop?
Left to their own devices states move to screw their minorities. There is a century of history on this. The federal government didn’t just wake up one day and decide to limit the states, the states made it impossible to do otherwise. We would still have legal segregation if it were left to states.
The effect would be centrifugal, emphasizing differences between states and between Americans. We already had this argument, it was called the Civil War. We are one nation, we should have one set of laws, and speaking personally I have zero respect for the bizarre, outdated notion of states. I am an American. I want the rights and privileges of an American citizen, not to be whispsawed between eco-commies in Vermont and Nazis in Alabama.
No, you can’t. You can smoke pot without breaking state law but you’d still be breaking federal law. Something like that is the case for all of the examples you’ve given. States discriminate against some minorities; the federal government against others. And so on.
Probably the biggest impediment to a single-payer healthcare system has been federal mandates. Once in a while, progressives will give lip-service to pursuing programs at the state level, but for nought. An unfortunate consequence of American history is that any loosening of federal power in areas where it currently exists is seen through the lens of Jim Crow, etc.
I started writing this before michael made the Civil War analogy.
The American Civil War did not decide that there were no states or that state laws were absurd. That is a misinformed reading of American history.
The states continued to hold the whip hand in American government until the expansion of the role of the federal government in the first half of the 20th century.
Michael, you’re presenting the issue incorrectly. Rather than asking why isn’t Texas willing to live under California law you should be asking why California isn’t willing to live under Texas law? The United States is too large, too fragmented, and too diverse for one size to fit all.
Greater financial dependency on the central government is inevitable as economies monetize in that government’s currency. Today with 99% of transactions going through a federal banking system that process is complete.
If that dependency on variable grants is a problem the proper response is to enact an ezpenditure sharing program where states receive guaranteed funds based on population.
In truth I doubt this is really much of an issue. The real problem is no one much gives a damn.