When people suggest that the federal government send out money to help states or towns or individuals, where do they think that money comes from? Sometimes it seems they believe that dollars swim around in vast schools beneath the placid surface of the Potomac just waiting for the fishing fleets of the Department of the Treasury to net them and dry them and disperse them, an inexhaustible supply of federal resources available to cure all ills. Or perhaps FDR was really an alchemist whose bequest to the nation was not merely the spending habits of the New Deal but a philosopher’s stone with which subsequent Presidents and Senators and Congressmen could support their grand fiscal promises by transforming lead into gold.
The reality, of course, is that there is no magical and bottomless well of wealth from which federal assistance gushes forth without cost or consequence. The federal government aggregates money for its beneficence in the same way every government does: it extracts it from other uses, either by taxing its citizens or by borrowing from the nation’s reserve of capital.
…The only rational reason to argue that the federal government should assist the state of New Hampshire in making internet access universal — or that the federal government should help with any other infrastructure project — is that you believe the citizens of New York and California and Massachusetts and New Jersey and Kansas and Illinois should subsidize our needs or desires.
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