Now here’s a surprise: Federal COVID relief programs have been plagued with fraud and abuse.
As James Freeman notes in the WSJ, wasn’t the waste in the COVID relief program sort of the point?
Shutting down much of the economy and attempting to replace it with federal spending, borrowing and money creation is not a strategy for productivity. But when it comes to the amount of theft, a new estimate really is a surprise—and a truly stunning one.
Axios’ Felix Salmon Reports:
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.
Blake Hall, CEO of ID.me, a service that tries to prevent this kind of fraud, tells Axios that America has lost more than $400 billion to fraudulent claims. As much as 50% of all unemployment monies might have been stolen, he says.
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.
“These groups are definitely backed by the state,” Talcove tells Axios.
Much of the rest of the money was stolen by street gangs domestically, who have made up a greater share of the fraudsters in recent months.
There’s More Bad News
The great American rip-off is not over yet, warns Mr. Freeman.
As money continues to churn out of Washington. Lorie Konish of CNBC reports:
More than 2.3 million new stimulus checks have been sent, representing over $4.2 billion in payments to Americans, the government announced on Wednesday.
In total, more than 169 million payments worth about $395 billion have been issued since Congress passed the American Rescue Plan Act in March.
That legislation authorized payments of up to $1,400 per person, plus $1,400 per eligible dependent, for individuals and families who fall under certain income thresholds and also meet other requirements.
From John McCormick (WSJ):
The U.S. budget deficit grew to a record $2.1 trillion during the first eight months of the fiscal year as spending continued to outpace tax receipts that are rising as the economy recovers from the damage inflicted by the Covid-19 pandemic…
Outlays rose 20%, to a record $4.7 trillion, driven by payments for jobless benefits, nutrition assistance and Covid-19 relief programs including emergency small-business loans and stimulus checks to households.
At a future date, Mr. Freeman reminds readers, “the kids who are now in U.S. households will have to pay for all this.
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