Growing Programs Versus Saving Money in Waste, Fraud, and Abuse

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A recent report from the federal Government Accountability Office noted that “improper payments” through government benefit programs have increased dramatically–by more than 300 percent from 2003 to 2014, reaching $125 million.

Eliminating “waste, fraud, and abuse” has become something of a go-to promise for political purposes, often as a hypothetical funding source for desired programs. But taxpayers should be wary of bureaucratic attempts to trim spending around the edges; tendencies will always be toward more money transferred out of their pockets.

As a matter of simple mathematics, erroneous payments can increase for one of two reasons: Either the size of the program grows, or the error rate increases. If a strategy for reducing the error rate results in a much larger program, then it will wind up costing more money. The State of Rhode Island is on the cusp of proving this principle.

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  • Rhett Hardwick

    I think the figure suggested is probably small. I am sure that Medicare absorbs all of the 125 million. Just a few months ago there were articles about 40% of disability claims were admitted to be fraudulent and a bunch of ALJ’s were fired for being too lenient. Given the size of the budgets, it is hard to believe that 125 million would even be detectable.

  • ShannonEntropy

    Some fun “waste, FRAUD & abuse” reading =►

    http://www.reformssdinow.org/wp-content/uploads/2013/04/Fraud-SSDI.pdf

    I have one relative by marriage who not only brags about having evaded literally millions of dollars in income taxes, he now collects SSDI for a “bad knee” even tho he bikes hundreds of miles a week. [[ He put his company in his son’s name; continues to work full time; and collects his income as “stock dividends” from his firm ]]

    I don’t know whether to turn the guy in or admire him for his unbelievable chutzpah … prolly the latter … but I have promised to visit him at the ‘Club Fed’ minimum security prison he will be sentenced to if or when he ever gets caught

    • ShannonEntropy

      p.s. His # 1 Pro-Tip for would-be tax evaders
      …. NEVER file a ‘Schedule C’ with your 1040
      https://www.irs.gov/pub/irs-pdf/f1040sc.pdf

      99% of all audits of businesses are initiated by something that caught an IRS Examiner’s eye on a Schedule C

      To avoid needing to file one, you make yourself an “employee” of the business, not the proprietor; and write yourself a W-2

      Of course now he has moved beyond even that subterfuge; and reports *zero* earned income

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