COVID Spending: The Triumph of Hope Over Experience

There's a jokey description of second marriages--the triumph of hope over experience--that could equally be applied to "emergency" government spending.

The hope is that the spending will be somewhat effective in meeting whatever the need was this time and that there would be some oversight that would limit the waste, fraud, and abuse.

What did happen with multi-$billions being spent on COVID relief in a short period of time? The headlines, in chronological order:

November, 2020: Prisoners’ fake unemployment claims cost state hundreds of millions, California D.A.s say

October, 2021: California EDD Fraud Payments Total At Least $20 Billion

September, 2022: Covid Fraud Hits $45.6 Billion [bold added]

The IG first alerted Labor to the scope of the problem with reports in February and June last year, identifying $16 billion in potentially fraudulent payouts to large and small operators of unemployment scams. A new IG memo last week identifies $30 billion more in fraudulent payments—for a total of $45.6 billion. That’s three times what the U.S. has spent to help Ukraine fend off Russia.

The various benefit scams are well-known, and the IG revised upward the tallies of each category. Individuals who fraudulently claimed benefits in more than one state got away with $29 billion. Con artists who used suspicious email services designed to hide identities have claimed at least $16 billion. Swindlers using the Social Security numbers of ineligible federal prisoners and dead Americans landed some $400 million more.

Your humble blogger takes solace in the fact that, while government fiscal controls are a hot mess and the IRS is over a year late in processing returns, our election systems will operate smoothly in less than a month to record our satisfaction with the way things are going.

Update - 10/6: For those who insist that COVID fraud and the IRS are separable problems the following should be interesting.

Five current or former Internal Revenue Service employees were charged with schemes to defraud the Paycheck Protection Program and Economic Injury Disaster Loan Program by the U.S. Department of Justice.

The defendants allegedly obtained funds under the federal stimulus programs, authorized as part of the CAREs Act, by submitting false and fraudulent loan applications that collectively sought over $1 million, according to court documents. They then used those funds for cars, luxury goods, and personal travel, instead of the purposes authorized by the PPP or EIDL Program.