States Are Hostage to Federal Dollars

Former Blackrock manager Ed Dowd tells Natalie Winters that the U.S. government has subsidized state budgets since the Great Financial Crisis. Right now, most state budgets get 40 percent of their budget from the federal government. States no longer need to compete for private capital in the bond markets but they do have to go to Washington, D.C. to compete for federal dollars. The centralization of power makes corruption more likely in the D.C. Swamp. States have given up their economic and political sovereignty to the federal government.