The myth of "federal funds"

The Denver Post has a story on a new Colorado law, signed by Governor Bill Ritter on Tuesday, that puts a fee on hospitals in an effort to comply with a federal program that provides matching funds for "Medicaid coverage and other health coverage."

The Post's headline says, "Federal funds will help enroll more people in Medicaid." This is misleading. It implies the federal government has its own money.

It does not.

The federal government takes money from its citizens, almost all of whom live in a state, then doles it back out after making those same citizens, via their elected officials, jump through a series of hoops. After, of course, taking some off the top for their effort.

If we cut out the middle man in this process, we would all be better off.