Federal gold rush is bankrupting country.

• Position: Welfare State

We are in the midst of the largest Federal gold rush since the 1960s, as government spending is growing by leaps and bounds. The budget hit $3,900,000,000 this year, double the level of spending just eight years ago. The government also is increasing the scope of its activities, intervening in many areas that used to be left to state and local governments, businesses, charities, and individuals, cautions Chris Edwards, director of Tax Policy Studies at the Cato Institute, Washington, D.C.

By 2008, there were 1,804 different subsidy programs in the Federal budget. Hundreds of programs have been added this decade--ranging from a $62,000,000,000 prescription drug plan to a $1,000,000 anti-drug education grant--and Pres. Barack Obama's stimulus bill created even more.

In recent years, Edwards points out, the range of Federal control over society has widened as politicians of both parties have supported nationalizing many formerly state, local, and private activities. One measure of the government's rising intervention is the number of programs listed in the 2,205-page Catalogue of Federal Domestic Assistance, an official compilation of all aid or subsidy programs, including grants, loans, insurance, scholarships, and other types of benefits.

CFDA was launched in the mid 1960s after members of Congress realized that they needed a guide to help their constituents access all the new Great Society handouts initiated by Pres. Lyn don B. Johnson. By 1970, there were 1,019 Federal subsidy programs.The number grew in the late 1970s, but was cut back in the early 1980s by Pres. Ronald Reagan. The number of subsides started expanding again in the late 1980s, but leveled out in the late 1990s as Congress and Pres. Bill Clinton briefly restrained the budget. Alas, laments Edwards, all restraint vanished this decade, and the number of subsidy programs has exploded 27% with the passing of expansionary laws in agriculture, homeland security, transportation, and other areas.

There has been a large increase in the number of agricultural initiatives due to bloated farm bills passed in 2002 and 2008, as well as homeland security and justice programs, which subsidize local activities such as firefighting and policing, Edwards reports. While those are important activities, it would be more efficient if they were funded locally because Congress often steers such money to projects of dubious quality and little national security relevance.

The number of subsidies in...