At the height of the COVID pandemic, most states issued lockdown orders. These orders shut down countless businesses, forcing Americans out of work. Regardless of how serious the threat of COVID might have seemed to you, the real looming threat for millions of Americans was trying to make ends meet.
So, the federal government rushed to deal with this problem, by shelling out historic amounts of cash in unemployment. More people went on unemployment than ever before. And the government kept pouring out the cash. Few bothered to ask where all this money was coming from… and where it was going.
Big surprise—much of that money was wasted. A new study reveals the government flushed billions in a rush to fix their own mistake.
A federal watchdog says billions of taxpayer dollars have been wasted through unemployment programs in the past year, and that number is likely to rise.
The Government Accountability Office released a report examining unemployment benefits during the COVID pandemic that found states and territories had overpaid by $12.9 billion between March 2020 and April 2021.
The Department of Labor was given billions to detect and prevent fraud, but that wasn’t able to stop the rampant waste and abuse uncovered by the GAO. [Source: Just the News]
Wow, this is great news. In their mad rush to slap a Band-Aid on the problems created from government-mandated lockdowns, states wasted an estimated $12.9 billion in overpayments. The GAO records that this massive blunder was the result of “rampant waste and abuse.” And this amount is likely much higher, since only 45 states have reported in and 7 of those have detailed overpayments yet.
You might be wondering, how can a state waste money in overpayments? Well, the government is very bad at doing its job. That might sound like a baseless insult, but you need to understand how government works. A company needs to justify every dollar it spends. It has to make sure the money that goes out helps bring more money back in.
The government—both state and federal? They don’t need to do that. So, agencies that are designed to shell out money to the public (either welfare or unemployment) aren’t that careful. Even in the best of times, money is wasted. Now imagine how sloppy states were, when everyone was panicking about the virus from China?
But in reality, that is no excuse for wasting more money than some countries see in a lifetime. The government has an obligation to use taxpayer dollars very carefully. This came as a result of waste—meaning, blatant lack of attention to where the money was going and essentially throwing it away. Not to mention abuse—people in the system overused it to get more than they needed.
And that doesn’t account for those overpayments that were made thanks to fraud.
In both cases, officials were supposed to prevent it from happening. But instead, they sat back and did nothing. It took an independent agency to exposed this situation.
Some of that money might be recovered, but it’s very unlikely all of it will be. This is yet another example of how big government always results in lost money.
Author: Sam Jones
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