I & I Editorial BoardSome are estimating that more than half of federal income tax revenues are devoured by fraud. This should not come as a shock. A massive government that funds everything from small businesses to health care to child care to housing is a rich target for thieves. Sharply reducing its size would limit the opportunities to steal from taxpayers.
Bandits have been defrauding of the U.S. government on such a colossal scale that even the legacy media has had to cover it, at least somewhat. The Minnesota Somalis looting the public fisc blew the lid so high that now smart folks are finding institutionalized fraud far, wide, high and low.
As noted in a March executive order, “the Government Accountability Office estimates that the federal government loses between $233 and $521 billion annually to fraud.” That higher number might be in reality a low-end estimate, because the money flows from Washington from a number of orifices outside the Treasury Department, and an accurate tracking is simply not possible.
We say this because in fiscal 2024, non-Treasury disbursing offices “were estimated to be responsible for 181 million payments totaling over $1.5 trillion,” says the White House, roughly 22% of the entirety of federal dollars disbursed. Combine this fact with the fraud that is being uncovered and it’s obvious we’ve reached crisis levels.
We’ve seen various suggestions that if we were to eliminate fraud (and waste and abuse), Washington would be able to cut the exorbitant income taxes we are obliged to pay. It can’t be overstated what a bonus that would be for household finances and economic growth. But we cannot leave the fraud machine in place, and that machine is the federal government.
A government as immense as the monster in Washington that sends grants to state and local governments creates a multitude of gateways for graft and corruption.
“Large increases in grant revenues (i.e., windfalls) provide opportunistic actors with an expectation that they can engage in corrupt practices before such systems are adequately implemented,” say the authors – three of them from George Washington University in our nation’s capital – of an academic paper published in 2024.
They suggested “the appointment of a new federal oversight agency” would have a “deterrence effect,” as it would be able to put “fresh eyes” on the process and monitor local government more closely. But as J.D. Tucille noted in a review of the paper for Reason, “reining in corruption isn’t easy.”
The only logical solution is to limit the possibilities by thoroughly downsizing the beast, which has grown well beyond the point to which its size has nurtured and sustained the “professionalized the pathways of corruption” and “is doing many more things than can be done with tolerable honesty.”
We are realists and understand that shrinking Washington is about as easy as threading a needle with a rope.
But Donald Trump was elected to decrease the length, width, and depth of the federal government, and while his efforts after eight years will be modest at best, Americans do have the ballot box to elect presidential and congressional candidates who will continue what he started. Maybe the Minnesota scandal is a watershed moment that will anger voters enough for them to understand what they have to do.
— Written by the I&I Editorial Board
As long as great swaths of the nation are prepared to pay for goods and services under the table, there’s no relying on the honesty of the public to remove dishonesty from public life, let alone from government. It’ll be as syphian task as long as the honoring of the social contract is comatose.
Shut off the money
Only government-like work (promulgated by-for instance-the “experts” at George Washington University) would recommend that the creation of another governmental body would rein in the fraud, waste and abuse that other governmental organizations oversee but cannot supervise.
Why do criminals steal from government programs funded by our Government. Because, as Willie Sutton put it, that’s where the money is.
The big mistake-in my opinion-was the Federal Government pushing aside private charity organizations in order to be the supreme charity organization.
The only problem with this? Private charities can monitor the accuracy and legitimacy of their charity better than Government can. Why?
Because private charities are actually in the giveaway business. Because it is so important to them they do not want fraudsters stealing the funds they they would rather distribute. Private charity supervisors oversee and judge who legitimately deserves the private charity.
The Government has no incentive to not squander taxpayer money. As a matter of fact, a moral problem crops up because there is so much darn money that needs to be distributed. If the Governmental charity is truncated, then the person who works in the Government for that charity is out of a job.
Moreover, political parties and private organizations who influence the political party that wants to give away money have become nothing but grifters. Both are either paid by the Governmental charity system or make their living politically influencing how the money is spent.
Additionally, because of our democratic voting tradition, voters who depend on Governmental charity funds can vote to spend other people’s money.
This is the bane of democratic traditions-and is why such few functions were originally apportioned to the Federal Government to do.
Getting rid of 2/3rds of the Federal Government is a good place to start-but is unrealistic. Those who suck at the teat of the Federal Government would cry heartily if they were fired from their jobs.
I remember the first major effort at this, the Grace Commission, which evolved into Citizens Against Government Waste. I was part of the Grace Commission during its existence. The problem that we had after completing our work was to get Congressional buy-in on the proposed solution. Sadly, it never happened.
The next step was the Fair Tax proposal, which never got a Congressional hearing. I am not making this a detail of every plan proposed, but most of Congress wants the grift continuing.
There always is a part of Washington that wants to keep spreading the wealth around.
may never happen, nice dream, though
Two things, among many others, are required to eliminate this kind of fraud.
Stop all federal block grants to states.
Make all federal welfare payments to states conditional on them having federal oversight mechanisms on all state welfare payments, whether or not a given state program uses federal money.
Cut all levels of government, local, state and federal by two thirds to have better and more effective governments.
My city of Philadelphia’s website lists 124 departments, agencies, committees, commissions, etc., which are filled with tax paid employees. Half of the listings, no one has ever heard of, are fully redundant and duplicative of others, are decades past their shelf life or were never needed, except to hire Uncle Harrys and many more nephews. But, Philadelphia has been a monopoly of the Democrat Party for far too many decades to cut anything.
Giving raises to any and all unions, and themselves, hiring more Uncle Harrys is the speciality of the Party, followed immediately by raising all taxes, especially school taxes to keep the Teachers Union quiet and not teaching, to pay for the aforementioned sloth of their elected officials.
Cut all levels of government to achieve more effective governments for all of us.