Money meant for one thing tends to stick wherever it first lands

Economic theory predicts that a lump-sum grant to a local government should be spent the same way as an equivalent rise in residents' own income, since money is fungible. In practice, data from decades of government grants shows the opposite: cash handed to a government tends to get spent by that government, rather than passed back to citizens as tax cuts, as if the money were stuck to whatever pipe delivered it.

— Edward M. Gramlich (term coined by Arthur Okun), The Stimulative Effects of Intergovernmental Grants — Fiscal Federalism and Grants-in-Aid, 1979

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