Cutting Spending to Revive Federalism | Chris Edwards | Cato Institute: Commentary

Cutting Spending to Revive Federalism | Chris Edwards | Cato Institute: Commentary: "• Every dollar of federal aid sent to the states is taken from federal taxpayers who live in the 50 states. Sending all that money to Washington and back again creates a huge administrative burden in tracking the funding flows and dealing with all the regulations attached to each of 1,122 programs.

• Federal aid reduces state policy innovation because it comes with top-down rules that mandate conformity. State governments can't be 'laboratories of democracy' if they operate under one-size-fits-all rules from Congress.

• Aid programs spur overspending by every level of government, since politicians can appease special interests with the spending while imposing part of the funding costs on other levels of government. State politicians over-expand Medicaid, for example, because the feds kick in more than $1 for every $2 in new benefits.

• Liberals imagine that federal experts can rationally distribute aid to the neediest local activities. The reality is that politics determines the activities and congressional districts that receive the most aid. Even if politics were taken out of it, the federal government does not have the knowledge to efficiently allocate local funding across a diverse nation of 308 million people.

• The huge scope of the aid system means that federal politicians spend much of their time on local issues. Rather than focusing on national defense, they are busy fixing potholes in their districts. Pres. Calvin Coolidge was prescient in warning that state aid was 'encumbering the national government beyond its wisdom to comprehend, or its ability to administer' its proper roles.

• The three levels of government would work better if they resembled a tidy layer cake with separate functions, rather than a marble cake with jumbled lines of responsibility. The failure of our marble-cake government was evident in the disastrous lead-up to, and aftermath of, Hurricane Katrina."