There has been a great deal of breathless media coverage of the “devastating” impact of government spending cuts taking place due to sequestration. Meanwhile, instance upon instance of government fraud, abuse and waste—much of which could have been easily corrected to offset the impact of cuts—continue to crop up with little media ado.
One of the latest examples comes in the form of a report out from the St. Louis Federal Reserve, which points out that the Federal government paid out nearly $3.3 billion in fraudulent unemployment claims in 2011:
The unemployment insurance program in the U.S. offers benefits to workers if they lose their jobs through no fault of their own. In 2011, this program cost $108 billion, of which nearly $3.3 billion was spent on overpayments due to fraud.
…The dominant form of unemployment insurance fraud, however, is what’s called concealed earnings fraud. This fraud occurs when individuals collect unemployment benefits while they are employed and are earning wages. The overpayments due to concealed earnings accounted for almost $2.2 billion in 2011, two-thirds of the total overpayments due to all categories of fraud.
Some other examples of government waste that should make you think twice about how serious cuts to government spending really are:
- This year, the Federal government is slated to spend nearly $1 million on service fees for bank accounts that it doesn’t use.
- There is at least $95 billion in Federal overlap spending that could be reduced.
- And, over the next 10 years, Federal spending under sequester will increase — yes, increase — by $2.4 trillion instead of $2.5 trillion with the mandatory cuts.