The Government Fraud Racket

The Government Fraud Racket

by Dan Mitchell

With politicians like Barack Obama demanding higher taxes, this is a good moment to ask what we’re getting in exchange for the buckets of money we send to a federal overlords in Washington.

The answer is disappointing, but not surprising. We get lots of waste, fraud and abuse. Here’s an excerpt from Lurita Doan’s new column.

The dirty little secret that almost no one in Washington is willing to discuss is the rampant fraud that is embedded in the entitlement system. Democrats, led by Obama, Pelosi, and Reid, never discuss the high percentage of fraudulent payments in entitlement programs. Instead, they continue the mantra that entitlement spending must be preserved even in the face of exploding national debt, and regardless of disturbing signs of rampant fraud. Increasingly, we hear jaw dropping stories of abuse and fraud that should force our leaders in Washington to put the issue of fraud and abuse within the entitlement system formally on the table. Just last week we learned of the case of the “Adult Baby” , the 30-year old guy, that lives in a diaper, is fed by bottle and thus somehow entitled to taxpayer-supplied, social security disability for his condition. Strangely, this is the very entitlement system that Obama and Democrats not only insist that we preserve, but are anxious to expand. The case of the “adult baby” is a sad indicator of just how much fraud is already embedded into our rich entitlement system and how easy it has become for hucksters and fakes to gain access to taxpayer provided benefits. Currently, there are almost 2,000 federal subsidy / entitlement programs, and we know from GAO reports and from anecdotal reporting that fraud is rampant. Despite two decades of topping government lists (GAO) for waste, fraud and abuse, Medicare, Medicaid, housing assistance, Food Stamps (SNAP) and several other entitlement programs continue to expand even as reports of fraud plague the system.

But waste, fraud, and abuse is just a partial answer. We also get lots of dependency in exchange for our tax dollars. And we get a weaker economy.

Something to deep in mind when you read about how Republicans should be “flexible” and agree to a tax hike.