This is the Cato Daily Podcast for Tuesday, May 21st, 2019.

I'm Caleb Brown.

The federal government doesn't just get involved with handouts to individuals and corporations. they also subsidize state-level activities.

That changes the incentives for many state governments often in negative ways.

Chris Edwards is author of the new Cato Report restoring responsible government

by cutting federal aid to states. It's available today at Cato.org.

Over and above what the federal government provides to individuals in terms of transfer payments, what does,

what do the feds provide to states in terms of transfers?

Well, we have a giant budget deficits in Washington and the biggest problem are the two giant

entitlement programs for old folks, Social Security and Medicare.

But the second biggest part of the federal overspending problem is that the federal

government is increasingly involved in spending on state and local activities

through so-called aid to state programs.

So the federal government spends $750 billion a year on 1,300 different aid to state programs,

including programs for K-12 education and highways

and urban transit and community development and hundreds of other things.

These activities should properly be funded by state and local governments, and my

new Cato study discusses 18 reasons why federal involvement in these activities is detrimental, it's

inefficient, and it's bad for American governance.

Just to jump on to that,

certainly one of the reasons that aid to states directly ought to

concern people is that to the extent that local agencies or state governments

...