THIS is bad news for a functioning capitalist economy: federal aid has "supplanted sales, property and income taxes as the biggest source of revenue for state and local governments". The Heritage Foundation, no surprise, flips out at the news ...

via The state of the states | Democracy in America | Economist.com.

The money is taken from state residents by the Federal government, skimmed some to line Federal pockets, and then funneled back down to the states again. Talk about redistribution.