RALEIGH – For most of the past 50 years, presidents and lawmakers of both parties have badly mismanaged the finances of the federal government. In this season of bald partisanship and sharp-elbowed politics, surely all North Carolinians can agree with that.

But heaping scorn on the fiscal recklessness of Washington can’t get state and local politicians off the hook. It turns out that among the chief beneficiaries of the federal government’s deficit spending are states and localities.

I’ve recently been updating my data on gross domestic product and government finances going back to the 1959 fiscal year, as part of an article I’m writing on the perilous fiscal situation facing many of America’s state and local governments. Because one of the themes of my piece is the extent to which the federal government acts as an implicit borrower for states that aren’t supposed to finance their current operations with debt, I’ve been looking closely at intergovernmental flows of revenue.

What I found struck me as both fascinating and largely unrecognized even to fiscal-policy wonks: federal aid to states and localities is a major element of federal budget deficits.

Since 1967, the federal government has run budget deficits in all but five fiscal years. These deficits have ranged from small (less than 1.5 percent of GDP in nine separate years, most recently 2006) to large (between 4 percent and 5 percent of GDP in nine years) to scary (about 9 percent in 2009 and so far in 2010).

In all of those deficit-spending years, total federal grants to states and localities amounted to least 40 percent of the federal deficit. In most years, a majority of federal borrowing went straight to state and local budgets. More recently, the trend has been even more exaggerated – since the return of deficit spending in 2002, after the brief bipartisan budget-balancing of the late 1990s, virtually all of the federal deficit was consumed in revenue transfers to states and localities.

Until last year, that is. With the support of outgoing President Bush, incoming President Obama, and most of the Congress, Washington responded to the recession with a panoply of federal bailouts and spending programs, driving deficits to unprecedented heights. States and localities got a good chunk of the borrowed money, to be sure, about 40 percent. But most of it went elsewhere.

As I’ve written before, most state constitutions forbid the practice of financing annual operating costs with borrowing. They do so for good reason. Access to easy credit is particularly dangerous for teenagers and politicians, for similar reasons. They lack the long-term incentive, and often the knowledge, to make wise decisions. It’s best to impose responsibility on them through ironclad budgeting rules.

Unfortunately, easy access to federal borrowing subverts the states’ balanced-budget requirements. If North Carolina politicians can ask Washington for extra Medicaid money, education funds, or other bailouts they can use to fill in holes during recessionary budget years, they have fewer incentives to control state spending growth when times are good – or to pare expenses when the recession hits.

The result is a ratchet effect in state spending. Through booms and busts, the overall trend is higher in real terms.

Again, you can see it in the GDP data going back in time. Federal aid to states and localities has grown from about 1 percent of GDP in the mid-1960s to 3.6 percent of GDP so far in 2010. During the same period, total state and local spending rose from about 8.5 percent of GDP to 14.4 percent.

Evidently, states and localities would have increased their spending in the absence of federal borrowing. But access to its proceeds helped make state and local budgets larger than they otherwise would have been. Because most federally funded programs, such as Medicaid, schools, and highways, require state matching funds, the result can be calamitous for taxpayers in the long run.

Easy credit is a “favor” that Washington should stop offering North Carolina. North Carolinians end up paying for it all, anyway. It would cost us less if the federal government “gave” us less.

Hood is president of the John Locke Foundation.