Politicians and bureaucrats are (self-interested) conduits for taking money from one group of people and giving it to another group of people.
Milton Friedman famously explained that this is why they largely don’t care about how much money is spent or how effectively it is spent.
No wonder government programs, agencies, and departments waste so much money, year after year, decade after decade.
This observation about careless profligacy also applies to so-called emergency spending.
I’ve repeatedly written about the perverse impact of unemployment benefits that are so excessive that people have big incentives not to work.
But that’s just one problem with that program. Axios has a depressing report on how the turbo-charged benefits that were part of the coronavirus legislation triggered staggering levels of fraud.
Criminals may have stolen as much as half of the unemployment benefits the U.S. has been pumping out over the past year, some experts say. …fraud during the pandemic could easily reach $400 billion, according to some estimates, and the bulk of the money likely ended in the hands of foreign crime syndicates… Blake Hall, CEO of ID.me, a service that tries to prevent this kind of fraud, tells Axios that…50% of all unemployment monies might have been stolen… Haywood Talcove, the CEO of LexisNexis Risk Solutions, estimates that at least 70% of the money stolen by impostors ultimately left the country, much of it ending up in the hands of criminal syndicates in China, Nigeria, Russia and elsewhere.
USA Today reported on one Nigerian scammer who feasted on American tax dollars.
Mayowa is an engineering student in Nigeria who estimates he’s made about $50,000 since the pandemic began. After compiling a list of real people, he turns to databases of hacked information that charge $2 in cryptocurrency to link that name to a date of birth and Social Security number. In most states that information is all it takes to file for unemployment. …“Once we have that information, it’s over,” Mayowa said. “It’s easy money.” …prepaid debit cards issued by some state unemployment offices paved the way for fraud this year, security experts said. …Asked whether he feels bad about stealing from unemployed Americans, Mayowa pointed out that 70% of his peers in school are working the scams as side hustles, too.
Read more: ‘Pandemic’ Emergency Spending Riddled With Fraud