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Dear reader,
The administration believes it has identified the royal route to balanced l budgets:
The elimination of fraud within the system.
White House Deputy Chief of Staff, Mr Stephen Miller:
- I believe based on what I’ve seen and what I’ve heard, that we could balance the federal budget if the only dollars that went out of the Treasury went to individuals who are properly, lawfully, correctly eligible to receive them.
I am heart and soul against fraud. I am likewise for the most extreme punishment of the fraudulent under law — up to and including death by hanging.
Yet will the elimination of fraud bring the budget of the United States into balance?
Sorry, Fixing Fraud Won’t Fix the Problem
The United States Government Accountability Office — do not laugh! — estimates the federal government loses between $233 billion and $521 billion annually to fraud.
Several independent auditors estimate fraud may actually claim some $750 billion annually.
I incline, naturally, to believe the worst in men — and in government especially.
Let us then assume the $750 billion figure.
Last fiscal year’s federal budget deficit came in at $1.8 trillion. This fiscal year’s deficit will likely scale $2 trillion. Next fiscal year’s deficit will likely attain $2.2 trillion.
Thus we discover that the entire destruction of fraud… as likely as pigs’ flight… leaves the federal budget sunk deeply in deficit.
A happy improvement? Yes — by all means. Yet not a solution.
The Biggest Source of Fraud
The heaping majority of fraud centers upon the Medicaid system.
Here a certain Merrill Matthews, a Texas Republican, explains in The Hill that:
- Medicaid is a joint federal and state program. The federal government provides each state with money — referred to as the “federal match”…
- The federal match ranges from 50 percent for many states up to 76.9 percent for Mississippi. In other words, when Mississippi spends a dollar on Medicaid, the federal government pays 76.9 cents.
- The federal match creates an economic disincentive for states to stop fraud, because the federal government pays most of the cost.
- You will not be surprised to learn that states have devised ways to game the system to draw down even more taxpayer dollars from the federal matching grant. The federal government has tried to limit such scheming, but with mixed results.
What a Shock!
No, I am not surprised to learn that states have devised ways to game the system to draw down even more taxpayer dollars from the federal matching grant.
Nor am I surprised to learn that federal attempts to limit such scheming have been “mixed” — and please understand that “mixed” is a polite word for failure.
I would in fact be gobsmacked if federal attempts to limit such scheming were anything other than “mixed.”
My agents inform me of elaborate schemes in certain states. Politicians, largely belonging to a certain party, actively encourage fraud in exchange for votes.
I could reveal several disturbing details. Yet I had better keep them dark.
Concludes Mr. Matthews:
- Health care fraud exists because of the vast amounts of government money available, the complex systems that make cheating easy to hide and progressive politicians happy to shovel money out the door.
- It also doesn’t help that many bureaucrats think the solution to any problem is to spend more, and that administrators… fail to do due diligence policing the system.
A Possible Solution?
This fellow’s solution is to issue states Medicaid block grants. These block grants:
- Would not allow states to game the reimbursement system. States would suddenly have more incentive to police their Medicaid rolls and become the good stewards of taxpayer dollars they always should have been.
Just so. Yet I am far from convinced the proposal will carry forward. Too many interests — fraudulent interests — are against it.
And imagine states becoming the good stewards of taxpayer dollars they always should have been!
I request one single example.
As Baltimore’s Sage, the very late Henry Louis Mencken, once observed:
- Government is actually the worst failure of civilized man. There has never been a really good one, and even those that are most tolerable are arbitrary, criminal, grasping and unintelligent.
I have yet to encounter one lone exception. I concede, with considerable hesitation, that one or more exceptions do exist.
I have simply not encountered such an Elysium.
Democracy: The Natural Breeding Ground for Fraud?
I would even argue — I will in fact argue — that democracy is the natural breeding ground for fraud.
Think of all the competing interests with their competing demands upon the democratic system.
Think of all the parsnips that must be buttered…
Of all the hard-luck farmers who want their backs scratched… of all the hard-pressed businessmen who want their bellies rubbed… of all the overlabored teachers who want their apple… of all the downtrodden who want a hand up — or is it a handout?
All are attempting to work the angles, to get a bucket in the stream, to get a snout in the trough… to catch a penny.
And there you find the politician, eager to gratify the largest number of them. It is how he wins his election, and the next one and the next one after that one.
Does not such a system promote fraud?
Thus you can expect the president’s Task Force to Eliminate Fraud to end in the identical oblivion in which The Department of Government Efficiency ended.
I will devour every last one of these words if mistaken — without salt.
Regards,
Brian Maher
for Freedom Financial News
