All Power To The Washington Soviet! How The Fed Enabled Federal Spending To Soar While State & Local Outlays Flatlined

Perhaps the biggest reason we should expect the federal role to keep getting bigger is because it can do so easily. That is, state and local governments will continue to find it politically difficult to keep raising taxes to cover rising costs. The federal government, on the other hand, has a lot more freedom to spend.

This is because the federal government has much greater access to borrowed funds than state and local governments, and this borrowing process is also subsidized by the US’s central bank.