Wisconsin’s Badger Institute has a new book—Federal Grant Standing—that examines the $750 billion system of federal grants to state and local governments.
The federal grant or aid system is costly and bureaucratic. It undermines political accountability and sows distrust in government. The Badger book is chock full of unique data and survey information illustrating the problems. It examines the practical failings of aid programs within Wisconsin, but the lessons are applicable to every state.
The book discusses how federal aid prompts state and local governments to make bad decisions. And it describes how aid induces cost inflation, reduces innovation, and wastes everyone’s time on paperwork.
Sadly, the governments of Wisconsin and other states have become administrative arms of the federal government. Wisconsin’s Department of Workforce Development has 1,603 employees and 73 percent of them are paid with federal funds. Wisconsin residents may think that their state government works for them, but bureaucrats and politicians in faraway Washington are pulling the strings.
Democracy, local control, community, diversity, self‐determination, and transparency. Those are words that liberals like. Yet the giant federal aid‐to‐state system that liberals built during the 20th century has helped to destroy those values in American government.
I hope that policy wonks in other states pursue similar investigations of aid, and I hope that federal policymakers reconsider the system and start cutting.
You can read more on federal aid here and here.