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Poverty Revenue: The Subversion Of Fiscal Federalism, Daniel L. Hatcher

All Faculty Scholarship

Fiscal federalism is a staple of economic theory that underlies the federal-state partnership in the nation‘s largest federal grant-in-aid programs, such as Medicaid and Title IV-E Foster Care. The theory is founded on a simple principle, the collaboration of the federal government‘s financial power and stability and state governments‘ ability to deliver services tailored to regional needs. However, the theory ignores a vast industry that has grown around the flow of federal funds. In addition to providing operational and consulting services for all aspects of government aid, this poverty industry - which usurps inherently governmental functions and is rife with …