Want To Eliminate Fraud? Cut The Federal Government By Two-Thirds
Some are estimating that more than half of federal income tax revenues are devoured by fraud. This should not come as a shock. A massive government that funds everything from small businesses to health care to child care to housing is a rich target for thieves. Sharply reducing its size would limit the opportunities to steal from taxpayers.
Bandits have been defrauding of the U.S. government on such a colossal scale that even the legacy media has had to cover it, at least somewhat. The Minnesota Somalis looting the public fisc blew the lid so high that now smart folks are finding institutionalized fraud far, wide, high and low.
As noted in a March executive order, “the Government Accountability Office estimates that the federal government loses between $233 and $521 billion annually to fraud.” That higher number might be in reality a low-end estimate, because the money flows from Washington from a number of orifices outside the Treasury Department, and an accurate tracking is simply not possible.
We say this because in fiscal 2024, non-Treasury disbursing offices “were estimated to be responsible for 181 million payments totaling over $1.5 trillion,” says the White House, roughly 22% of the entirety of federal dollars disbursed. Combine this fact with the fraud that is being uncovered and it’s obvious we’ve reached crisis levels.
We’ve seen various suggestions that if we were to eliminate fraud (and waste and abuse), Washington would be able to cut the exorbitant income taxes we are obliged to pay. It can’t be overstated what a bonus that would be for household finances and economic growth. But we cannot leave the fraud machine in place, and that machine is the federal government.
A government as immense as the monster in Washington that sends grants to state and local governments creates a multitude of gateways for graft and corruption.
“Large increases in grant revenues (i.e., windfalls) provide opportunistic actors with an expectation that they can engage in corrupt practices before such systems are adequately implemented,” say the authors – three of them from George Washington University in our nation’s capital – of an academic paper published in 2024.
They suggested “the appointment of a new federal oversight agency” would have a “deterrence effect,” as it would be able to put “fresh eyes” on the process and monitor local government more closely. But as J.D. Tucille noted in a review of the paper for Reason, “reining in corruption isn’t easy.”
The only logical solution is to limit the possibilities by thoroughly downsizing the beast, which has grown well beyond the point to which its size has nurtured and sustained the “professionalized the pathways of corruption” and “is doing many more things than can be done with tolerable honesty.”
We are realists and understand that shrinking Washington is about as easy as threading a needle with a rope.
But Donald Trump was elected to decrease the length, width, and depth of the federal government, and while his efforts after eight years will be modest at best, Americans do have the ballot box to elect presidential and congressional candidates who will continue what he started. Maybe the Minnesota scandal is a watershed moment that will anger voters enough for them to understand what they have to do.
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