The Corner is loaded with good stuff today. And by good, I mean valuable information that is also quite depressing. John Hood displays how federalism, decentralized government and the concept of Jefferson’s little laboratories appears to be just about dead:

Federal funds are now the single-largest revenue source for state and local governments, edging out retail sales taxes. Of course, all federal funds derive from taxpayers who also live in states and localities, so the fiction of “free” money from “Washington” is one of the problems with this. Essentially, Congress and the administration issued a bunch of federal debt to finance state and local operating deficits — a subversion of legal and constitutional rules against the practice in most parts of the country, by the way — and thus bailed out state and local politicians who would have otherwise had to take responsibility for their past fiscal decisions and enact larger budget savings or tax hikes. Reckless fiscal policies, in other words, have been rewarded. Expect more.

I’m not sure “nanny state” or “welfare state” really captures the direction the country is moving toward. I think “Loan Shark state” is more like it.