The central government became large and permanent during the Great Depression, when more than 20% of Americans were out of work, when the capitalist economy was not functioning and when there was a great deal of despair. Essential to America's recovery was building a strong State to manage capitalism better than the capitalists can manage it themselves.
It was also at this time that the federal government built a welfare state for the casualties of the economic system. The American welfare state, which is smaller than the European welfare state but still significant, was born at this time. And it was born out of a sense of desperation and a realisation that the individual states did not have the resources, the capability or the resolve to deal with a crisis of this dimension.
Part of the problem of states handling economic matters is that private corporations are not limited to states. They are national and often international entities. So the idea that individual state governments can control private corporations that dwarf them in size, power and resources is impossible to sustain. So to the federal government, to the Federal Reserve, to the economists who work in Washington, to those who provide a social safety net and for those who need help to pay for scientific innovation, including the innovation that produced the IT revolution of the late 20th century, the support and resources of the central government proved absolutely critical. The America of today was built far more by the central State than by the individual states themselves.