The fraud of the rich and the fraud of the poor

Conservatives love to say that our biggest budget problems are found in entitlement fraud. One conservative estimate places it as high as $100 million a year. That could well be true. What is interesting is what you don’t hear in that estimate, or ever from the Right. To deal with that fraud requires more regulation and better enforcement, the very things they are passionately against and say would hinder business. Or perhaps they just don’t mind fraud when it leads to private gains, with corporations taking money directly from the pocket of consumers, and it only bothers them when the government is involved. That is essentially what Ryan and his plan call for. Just eliminate the government programs. Let the market do it. It won’t do anything to reduce fraud, but it will put the ill-gotten gains of that fraud into the hands of private corporations, many of the same ones that bought Representative Ryan his seat in congress. I’m all for more regulation and better enforcement. Let’s get rid of the fraud.
What I always find interesting in the Right’s discussions of entitlement fraud and how we must eliminate it to get the budget deficit down is the narrowness of their vision. Sure, it’s predictable. I just continue to find it amusing, and sad. They are concerned about fraud in organizations that help people, and think it is worth throwing out the baby with the bathwater to save $100 million a year. And they completely ignore any and all reports of fraud in the military industrial complex. Those frauds, when you google them, are in the billions, not the hundreds of millions. Remember the pallets of cash that we simply lost in Iraq, with over $12 billion in cash in the form of shrink wrapped bundles of 100 dollar bills? That’s 120 years worth of the high estimate of entitlement fraud mentioned above. I guess a billion lost here and a billion lost there is just the cost of doing war. Meanwhile, there should be no similar cost when it comes to helping our own. And that is just one of countless examples of fraud costing the taxpayer billions. But lose a fraction of that trying to help people in our own country? Oh, we can’t allow that.
It’s also important to remember that much of that $100 million in fraud every year is not going to poor individuals gaming the system (some is, and I doubt it is the majority). Most of it is done by corruption at the top, those running the system and funneling the money their way, getting rich themselves rather than helping the people they are supposed to help. Again, the only real answer is better regulations and enforcement. Again, the Right fights tooth and nail against the very notion of that.
And even that fraud in the military industrial complex pales when compared to the amount of money that has funneled up to the very top, the very richest people in America. Between 1979 and 2006 the after tax income of the top one percent increased 256%. Twenty-five years ago the top one percent took in 12% of the total income of Americans. Now it is about 25% of the total income.
According to the US Department of commerce, the total income of Americans in 2011 was about $12.9 trillion. If the top one percent is getting a quarter of the total income, that means that last year they got about 3.2 trillion. In 1990 the total income of Americans was about 4.8 trillion. It was certainly even less in 1979, but let’s just go with the 1990 number and say the top one percent took in even 20%, just giving them way more of the benefit of the doubt than they need. Twenty % of 4.8 trillion is about .96 trillion. That would mean that since 1990 the income of the top one percent has increased $2.2 trillion. That’s a little over $100 billion a year. I think the math is correct. Check it if you like. Now, $100 billion dwarves the entitlement and defense fraud put together. What have we gotten back from the wealthy for the huge gains our society has allowed them? They’re the job creators, right? That’s what we’re told over and over. So I would expect that would mean we are at full employment, loans for small businesses are easy to get, etc. etc. If that doesn’t seem to be the world you live in, ask yourself why.
Jim, I agree with all the things you are dissatisfied about. These are some additional things I am dissatisfied about.


About JP

We're two guys who met in college, in 1980. We've stayed in touch, and like to talk politics, current events, music and religion. JP is nore liberal than Sid, but not in every way. We figure that dialogue stimulates ideas, moderates perspective, and is in general friendly. These are things we need badly in these dangerous times. The blog name is taken from a song by Bruce Cockburn.
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