An alleged bulwark against the fifty states overspending like the federal government? Has been the old saw:
“The states can’t print money.”
“49 US states have some form of balanced budget requirement, which mandates that their operating budgets (excluding capital and pension funds) cannot run a deficit.
“These requirements vary in strength – some are constitutional and prohibit carrying over deficits, while others are statutory and allow more flexibility – but all but one state enforce them at stages like proposal, passage, or enactment.
“The exception is Vermont.…”
And yet without exception? Every state is in debt. Again from Grok:
“50 out of 50 states carry outstanding debt, primarily bonds/loans and long-term liabilities like pensions.
“Total state government debt is about $2.7 trillion, with 26 states exceeding $20 billion each and 10 over $70 billion.
“Even low-debt states like Wyoming ($2 billion) or South Dakota ($2 billion) have obligations.
“States with negative net worth (liabilities > assets): 37 states have a negative net position per the latest Comprehensive Annual Financial Reports (CAFRs), meaning total liabilities (including pensions) exceed assets.
“This is a stricter measure of ‘insolvency risk.’ Examples include California (net -$56 billion) and New York (net -$200+ billion).”
So the state governments are also messes of their own making. Just like the federal government.
And here’s a fun addition to the mix:
“A new policy brief from State Policy Network’s Center for Practical Federalism finds that the average state now relies on the federal government for 37% of its revenue, double what it was in 1990.”
Get that? The states are overtaxing. And overspending anyway. And going into debt anyway – despite various prohibitions on their doing so.
And overspending even more – on average, 37% more? Because the federal government is paying them to do it.
It doesn’t matter if the 50 state governments can’t print money? If the federal government is printing it for them.
This policy brief examines 2023 – the latest year of available data:
“That year, the federal government disbursed $1.05 trillion to states.”
And you KNOW it’s only gotten nigh universally worse ever since.
This isn’t a Blue-Red thing. Or a Left-Right thing. EVERY state is – to varying, huge degrees – addicted to federal government money.
The federal government is a drug dealer. The drug is money.
Here are its top 10 state addicts:
- Louisiana – 51.6%
- Arizona – 49.2%
- Missouri – 46.3%
- Wyoming – 46.2%
- Alaska – 45.1%
- Montana – 44.7%
- Mississippi – 44.3%
- Oklahoma – 43.9%
- Rhode Island – 43.1%
- Kentucky – 42.9%
The Big Four? California is 36th (33.0%). New York is 23rd (38.8%). Texas is 25th (38.5%). Florida is 26th (37.8%).
Nigh ALL the states are ever-increasingly addicted:
“State dependency remained almost as high in 2023 as during the peak Covid stimulus years…. 23 states are now more dependent on federal funds than they were during the height of COVID-19 relief. Only Idaho and New Mexico saw declines in federal reliance since the pandemic.”
Of course there are federal programs – Medicaid, SNAP, etc – that are federally imposed but state-run-and-paid-for.
So some of this federal money sloshing to the states is for those.
But NOWHERE NEAR the total percentages of federal money sloshing to the states. Over HALF of Louisiana’s ENTIRE budget? Puh-leazze.
This is the federal government buying silent compliance from states. That might otherwise object to being so completely subjugated to the federal government.
This is the federal government bribing the state governments into being fellow soldiers in the war against cutting any government anywhere.
It is very hard to make the case for limited government, constitutional federalism – when the states are this addicted to federal government money.
It is nigh impossible to do ANYTHING about the federal debt train – when it’s just the federal government you’re trying to tame.
It is a metaphysical impossibility to try to tame things – when all fifty states are also aboard the federal debt train.
And this is DC. So of course the wheel goes round – as the wheel always goes round. Again from Grok:
“State governments in the United States frequently engage in lobbying activities to influence federal policy, secure funding, and advocate for their interests….
“This spending primarily covers in-house operations, such as maintaining Washington, D.C., offices, staff salaries, travel, and occasional contracts with lobbying firms.
“Unlike corporate lobbying, much of this activity isn’t captured in public disclosures because state employees acting in official capacities often aren’t required to register under the Lobbying Disclosure Act (LDA).”
So a lot of the federal government money states get? Is used to lobby the federal government for more money for states to get.
And we have far less of an idea of how the states are spending our money – to get even more of our money.
You’ve of course heard of a pyramid scheme:
“(C)haracterized by its hierarchical structure, where participants earn money primarily by recruiting new members rather than selling products or services.
“Each new recruit pays a fee to join, which is then distributed to those higher up in the pyramid.
“This model creates an unsustainable cycle, as the scheme relies on a constant influx of new recruits to pay returns to earlier investors.”
DC is running a reverse pyramid scheme. Where it bribes the states into joining and playing along.
That is: Until DC can no longer borrow or print enough money.
And then the unsustainable cycle comes crashing down upon us all.
This piece originally appeared on Seton Motley’s Substack. Reprinted here with permission.
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