Last year, I wrote about a 60 Minutes segment that investigated disability fraud. It was an amazing thing to watch, because in the old days, the show went after powerful people. Now it is primarily a rage program. It ought to be on Fox News. The segment focused on poor people living in economically devastated areas using the program to make ends meet. Certainly we don’t want them doing this but it is a sign of the desperation of the times. But apparently the oligarch apologists can’t be bothered to do stories about government officials at every level doing everything they can to stifle the economy.
I noted at the time that the bad thing about the fraud hysteria is that by making it harder to get disability, more people who ought to get it will be denied. So just how big a problem is disability fraud? According to Associated Press, there has been $2 billion of fraud in the last seven years. That sounds like a lot of money, but it really isn’t. Dean Baker noted this morning that it represents just over 0.2% of the entire outlay of benefits.
Conservatives, of course, will claim that no level of fraud is acceptable. But that’s just stupid. There will always be crime — the vast majority of it never solved. Does that mean we should just stop living? Baker pointed out that it would make no sense to spend $10 billion to stop $2 billion in fraud. As long as fraud is minor, it is acceptable.
One of the annoying things about these reports is that they imply that such fraud doesn’t exist in the “perfect” private sector. But that just isn’t true. According to Blue Cross Blue Shield, fraud may cost the healthcare industry $200 billion per year. This number is almost certainly greatly inflated. But it shows that the private sector deals with fraud and some level of fraud is acceptable. It is all about the costs of fighting it.
Another example is shoplifting at Walmart. The company supposedly loses $3 billion per year from theft. They do what they can to minimize theft. But what they don’t do is try to completely eliminate it. They could, for example, require that everyone leaving the store submit to a strip-search. Clearly that would be both effective in eliminating theft and catastrophic to the company’s bottom line.
But none of this kind of reasoning seems to come up in discussions about fraud in government programs. Part of the problem is that private companies don’t make that big a deal out of the theft that effects them. But more important, when it is the government, the press makes it out as a big deal. You know: because it is our money that is getting stolen. But that’s also true of private sector healthcare fraud and shoplifting at Walmart. That theft causes prices to go up. So this razor focus on the minor imperfections of government programs is just an anti-government double standard.
Dean Baker is right that Associated Press never would have written such a story with the relative values. “Disability Program Defrauded of 0.2% of Outlays” just isn’t an exciting headline. But it’s another matter with, “IG: $2B in Disability Claims Approved by Mistake.” As noted, that $2 billion figure is for seven years, so even it is deceptive. Why not a big headline, “Walmart Losses $21 Billion to Theft Increasing Price of Toilet Paper”?
What’s most frustrating is that the article is presented as simple objective reporting. But it is rich in political significance. Like the 60 Minutes segment last year, the implication is that the disability program is rotten to the core. But neither report made any mention of the size of the program nor the relative size of the problem. Although the reporters involved probably have little idea, they are working as propagandists for anti-government activists who want to destroy the program for entirely different reasons.
And the result will be that poor people get harmed. According to the Associated Press article, “The average monthly benefit for a disabled worker is $1,146.” This is from a media establishment that can’t get worked up about billions of dollars in fraud committed by the world’s largest banks. But when a poor person is getting less than $14,000 per year, well, that’s an outrage!