Revenue Sharing
6th May 2009
Arnold Kling ponders the fact that money from the federal government is now the biggest source of revenue for state and local governments.
My prediction is that this will persist even when there is a recovery. It is bad news in many respects. It makes the spenders (in this case, state and local governments) even less accountable for making sure that money is well spent. For the politicians, the incentive to spend other people’s money is big enough when its your own constituents paying the taxes, and it’s even bigger when someone else’s constituents are paying the taxes.