The Worst Federal Spending?

OK, I know there are lots of strong competitors for the title of worst Federal spending, but transfers to state governments is, to my mind, among the very worst (from here)

Specific problems with this spending include:

  • Terrible accountability, even worse than for most of Federal spending.  Feds appropriate the money but have only limited ways to enforce accountability and almost no ability to track its use
  • Awful incentives, as much of this money is given as matching funds that simply encourage more spending at the state level and create, in difficult budget times, the almost impossible problem of having to cut $2 of spending to save $1 of state appropriations.  Makes matching fund programs almost impossible to cut, though kudos to Wisconsin and Florida for doing the right thing with Federal matching funds for high speed rail
  • Frequently used to undermine the 10th recommended.   Seat belt laws and 55-mile-per-hour speed limits enforced by threats of withdrawal of Federal funds.  Ditto Title IX in state schools.   The Feds are like narcotics pushers, getting the states hooked early on easy money and then using their addiction to these funds in all kinds of abusive ways.


  1. John Moore:

    Absolutely agree - especially about the 10th Amendment (you may want to amend your "recommended"). This stuff is a nasty narcotic.

  2. Noah:

    Don't forget the vig as some of that money sticks to Federal hands on its happy trip from my pocket to state and local employee pensions.

  3. dovh49:

    Makes me think of what recently happened here in Chino Valley. We now have a bus service. For a town of 13k people where most of the people live on an acre or larger lot. You cannot tell me that a bus service like this is useful. They would have better served the community by saying licensing laws don't apply in this community, then you would see the price lowered and make it much more affordable for the poor. When I saw this happen here I even more appreciated all your articles against lite rail and such.

  4. aczarnowski:

    This is the same reason I'm happy to see Local Government Aid getting attention in MN, mostly as cuts to local governments. It forces the localities to get real about their value add to citizens and just how big their tax burden really is.

    Now if we can just get that LGA money back from the State!

  5. Anna:

    Accepting federal funds also ties the hands of state and local governments in other ways. For example, school districts that accept Title 1 funds for education services to poor children are not allowed to fund, with their own money, the same type of services for children in schools that don't get Title 1 funds. This is ostensibly to prevent districts from using federal funds to replace money that would have been spent anyway, but in reality has the effect of preventing any kind of decentralizing reform or allowing flexibility to experiment.

  6. me:

    jesus christ, obama gets in office and it jumps by $250billion

  7. xj:

    >jesus christ, obama gets in office and it jumps by $250billion

    Where do you think all the "stimulus" money went?

  8. marco73:

    The feds are actually having a hell of a time trying to send Florida $2.4 billion to get start on the high-speed rail from Tampa to Orlando. The governor told the feds, simply, "Florida cannot afford to spend money on this project."

    All the local pols are absolutely up in arms that we turned down so much free money. But Florida would have had to come up with a whole pile of money for the expected cost overruns, and then a whole pile more for the operating costs.

    The governor has smartly let out some more rope for local pols to hang themselves. He says that if the local cities and counties will guarantee the additional funds, that the state government won't stand in their way.

    That really isn't working out too well. So now the local mayors, instead of making the governor the bad guy, are having to go in front of their city councils and asking for a guarantee that the cities and the counties will bear any cost overruns. Yeah, we don't have money to fix potholes, but we have plenty of money to guarantee building the line for the shiny choo-choo.

    I won't get into how the private rent-seekers have been trying to paint the state in a bad light. If this train was such a good deal, why do GE, Bethtel, and the other mega-corporations have to have a guarantee from the 15000 citizens of Plant City that taxpayers will be on the hook for any cost overruns.

    Transportation Secretary Roy LaHood was so embarrassed by being turned down for the money that he extended the deadline by 1 week, for the governor to "think about it." But the governor has stood firm.

    The situation in Wisconsin has been making the most news in the past 2 weeks, but the real story of 2011 may turn out to be smart governors who turn down Fed money that just ties the state budgets into being beggars to the Federal government.