September 16, 2011
WORD OF THE DAY
1. the division (of a country, territory, etc.) into small, quarrelsome, ineffectual states
2. the division (of groups, areas, etc.) into contending and ineffectual factions
Regulatory excess, moreover, is mirrored by countless fiscal programs that encourage states to “experiment” with federal dollars. The most prominent and menacing example is Medicaid, which now consumes almost a quarter of state budgets (much more in some states). For the most part, this is not a result of federal coercion or mandates. It is a result of the states’ voluntary decisions to expand Medicaid so as to attract federal matching funds (between fifty and eighty cents on the dollar, depending on the state). The states’ perverse incentives to expand their domestic welfare state on our collective nickel—trillions of nickels—is, again, a federalism problem.
In a sentence, then: our federalism presents a two-sided problem—excessive centralization in some respects; excessive decentralization (regulatory balkanization, fiscal profligacy and moral hazard) in other respects. Which of these problems is more serious? It’s hard to say. Quite clearly, however, our federalism’s centrifugal tendencies are more than a slight detour in a relentless the march toward centralization.
(The State of Our Federalism)
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