The right way for America’s states to use federal largesse

NEARLY A YEAR has passed since Congress approved the American Rescue Plan Act (ARPA), promising spending of $1.9trn, equivalent to 9% of GDP. Many, including this newspaper, worried that such federal largesse looked excessive. Those fears have been borne out. ARPA helped create a surge of demand that contributed to the inflation that is plaguing America and which is higher than in other advanced economies. It also gave states and local-government agencies over $650bn—more than they knew what to do with.