Imagine finishing high school and realizing that no matter what path you take – college, a job, or starting a business – your money doesn’t go as far as it should.
Your car loan is more expensive, rent keeps rising, and groceries cost more monthly.
If you go to college, tuition is higher; if you don’t, more of your paycheck disappears in taxes.
This isn’t just bad luck – it’s the result of reckless government spending that fuels inflation, drives up interest rates, and makes it harder for everyone to get ahead.
In fiscal year 2023, federal funds to state and local governments totaled $1.1 trillion, nearly one-fifth of all federal spending and 4 percent of US GDP. This money doesn’t come free — it’s taken from taxpayers, borrowed from future generations, or printed by the Federal Reserve, creating inflation.
Even states that claim to be fiscally conservative are hooked on federal money. Texas took in $102 billion for its 2024-2025 budget, nearly one-third of its total budget. That means Texas, like all states that average 36 percent of their budget from federal funds, is highly tied to federal mandates for what it wants to do.
The biggest driver of this dependency is Medicaid, which received $616 billion in federal spending in 2023, over half of all federal funds to states. Many states expanded Medicaid with temporary federal funds, but when Washington inevitably pulls back, states will be forced to raise taxes, cut services, or both, burdening many families. The same pattern applies to federally backed education and transportation spending.
The more states rely on Washington, the less control they have over their policies.
This isn’t just about wasteful spending — it directly hits American households. More deficit spending contributes to higher interest rates, making mortgages, student loans, and car payments more expensive. The Fed buying Treasury debt to keep interest rates lower by increasing the money supply creates inflation, forcing families to stretch their scarce budgets further.
Every dollar the federal government spends on state programs is taken from the economy, where businesses and individuals could have put it to far more productive use. The ongoing budget fight in Washington makes one thing clear: states can’t count on federal funds forever.
Through the Department of Government Efficiency (DOGE), President Trump and Elon Musk have started freezing wasteful grants and unnecessary spending — steps that should have happened long ago.
Critics claim this is an overreach, but the real issue is decades of reckless spending leading to a $36 trillion national debt and a Congress unwilling to act.
“A government big enough to give you everything you want is a government big enough to take from you everything you have.”