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Judy’s World: The 10th Amendment is Meaningless as long as the States are on Fed’s dole
These reflexive calls for Washington to pick up the tab underscore one of the greatest shifts of power in American politics during the last four decades: the transition from state and local autonomy to federal subsidy and control. This centralization of government was made possible largely by grants-in-aid, money provided by the federal government to state and local governments or private parties. They have become the third largest category in the federal budget, trailing only Social Security and national defense.
According to the Congressional Research Service, there were 1,724 of these grants in fiscal year 2011, paying for things such as bridges, teachers, Medicaid, farm subsidies, and abstinence programs. The total cost of these federal grants was $515 billion, up 160 percent in real terms since the beginning of the 1990s and nearly 60 percent since 2000. After the adoption of the American Recovery and Reinvestment Act, a.k.a. the 2009 stimulus bill, grant spending increased by 16 percent in 2009 and 11 percent in 2010—the highest annual spikes in history.
Grants are not merely a substantial part of the federal budget. They have become like a drug for the states. The federal share of total state spending rose from 25.7 percent in 2001 to 34.1 percent in 2011. State and local governments drink up roughly 80 percent of total federal grant spending, with the remainder going mostly to nonprofit organizations providing services at the state and local levels.
The states are on Fedzilla’s dole and the percentages are staggering.
States with the highest dependency on the Federal government for revenue are as follows:
Federal Aid to State Budgets
MS – 49%
LA – 47%
AZ – 46%
SD – 46%
MT – 42%
TX – 40%
Even a few states at the low end of federal dependency are in the high 20% percentile, with most states depending on Fedzilla for 30-40% of their spending.
The very significant growth in federal state aid has resulted in powerful public sector labor unions, the massive growth in state programs and huge increases in public sector employees.
As the state grows, the private sector shrinks and what is left of the job creating private sector is relentlessly pounded with oppressive taxation to fund the ever growing public sector. It’s a vicious cycle that destroys the economy that produces the wealth to fund the public sector. Ultimately, there is no money or wealth to fund government at all levels. However, the powerful public sector continues to ferociously lobby for higher taxation on the private sector to sustain its unsustainable plunder. At the end of the day, the public sector is nothing more than a parasite that is sucking the life, prosperity and wealth out of the people.