10 Ways for the Federal Government to Save Money…Almost Immediately

The massive federal budget deficits of the last several years have resulted in an unprecedented increase

in our national debt. Since President Obama came to office, the national debt has soared from $10

trillion to nearly $16 trillion, a 50% increase. This uncontrolled federal spending and the accompanying

increase in the level of national debt cannot continue. Otherwise we will find ourselves in the same

situation as Greece, Spain, Portugal, Italy and other countries whose massive social programmes

have led them to financial collapse. If we do not control the amount of federal spending, stop deficit

spending, and stop increasing the national debt, several things will ultimately happen. This isn’t

speculation, it is simply economic fact what will eventually happen:

1. Higher interest rates—as borrowing and debt increases, particularly since the US Treasury debt

has been downgraded for the first time in history, interest rates will eventually rise. Not only

will it cost more the Treasury to borrow money, individuals and businesses seeking bank loans,

mortgages, etc. will have higher borrowing costs.

2. Higher taxes—increased spending will result in higher taxes to fund the spending in addition to

the incursion of more debt

3. Lower economic growth—as rates rise and taxes rise, economic activity declines

4. Weaker dollar—Lower growth+Higher Taxes+Higher Interest Rates=Depreciation in the Dollar

5. Inflation—Continued accommodative monetary policy aimed at keeping rates low and

stimulating economic activity has massively increased the money supply. More dollars chasing

goods=inflation

If the President and the Congress are serious about reducing the deficit, it’s pretty simple—return the

budget to 2000 levels immediately. There’s absolutely no reason that the budget can’t be balanced

before 2020. Any politician who doesn’t support a return to 2000 spending levels isn’t serious about

cutting spending, eliminating the deficit, or reducing the national debt and should be voted out of

office. Would it be easy to revert to spending levels from 2000? No. Would it be painful for a lot of

government agencies and programmes? Yes. Can it be done? Yes. Would it be effective at eliminating

the deficit? Yes. If there a political will to do this in Washington, D.C.? No.

Remember, every dollar that the federal government spends, that is appropriated by members of the

Congress and approved by the President, is a dollar from the pocket of a working American or a business

that employs workers and creates jobs or is a dollar that is stolen from future generations of American

workers and taxpayers. Money doesn’t grow on trees. It comes from someone’s pocket. Borrowing the

money to fund spending is only robbing from Peter to pay Paul. Someone down the road will ultimately

have to foot the bill for spending today over which they may or may not have had any control or any

say.

In addition to reverting to 2000 spending levels, I’ve come up with a few additional ways that the federal

government could start saving money.

#1    Eliminate fraud in Social Security

Various estimates place improper payments of Social

Security benefits at over $8 billion annually. This could come in several forms such as continuing

to issue checks to dead people or people simply cheating the system. You wouldn’t think that

checks keep getting sent to dead people, but if their death isn’t properly reported to the Social

Security Administration, the checks keep coming. People are milking the system and robbing

from the Social Security Trust and every American worker and taxpayer. Review annually the

database, do cross checks, or have some computer programmer write a program that enables

searches of public death certificates, Social Security numbers, etc. to eliminate the fraud and

waste from paying dead people.

In addition, there are far too many instances where strung out and burned out druggies have

found some doctor to say they aren’t able to work or they have some mental deficiency that

prohibits them from working so they need to collect disability insurance. If you don’t think this

happens, go sit at the local Social Security Administration office for a week or two and check out

who’s coming in there. If these people are as messed up as their doctors say they are, I don’t

think they should be roaming the streets. They should be in institutions collecting their checks

and using it to pay for their care and treatment in the institution.

With roughly 207 million insured workers, the $8 billion improper payments are costing each

worker about $39 per year.

#2  Investigate Medicare Fraud

Just as there are improper payments in Social Security benefits,

there are massive amounts of Medicare fraud resulting in over $48 billion in improper payments

annually (not including any improper payments associated with the Part D prescription drug

benefits). The biggest perpetuators of Medicare fraud are healthcare providers who bill

Medicare multiple times, bill for products not delivered or services not rendered, bill for

medically unnecessary services or procedures, misrepresent services, falsify cost reports,

increasing units of service, kickbacks, and other fraud that results in overpayments or improper

payments. Why not put the IRS to good use and audit any healthcare provider that has received

a payment from Medicare? I bet the IRS would recover a good portion of these improper

payments.

In addition, if you read the statement by Kathleen King, Director of Health Care, United States

Government Accountability Office, in testimony before the Subcommittee on Oversite and

Investigations, Committee on Energy and Commerce, from March 2, 2011, it sounds like

the Medicare system is plagued by numerous management challenges that enable this type

of waste and fraud. If the people overseeing the Medicare programme are not competent

to do so, get rid of them and get someone in there who can do the job, put the controls in

place, and provide the proper oversight so that billions of taxpayer and workers’ dollars aren’t

misappropriated. With the technology we have today, it is inconceivable that we aren’t able to

better track payments, etc. to eliminate waste.

This fraud costs each worker in America about $232 annually.

#3  Welfare Fraud

Ronald Reagan once referenced welfare queens driving welfare Cadillacs. He

wasn’t far off the mark. We’ve all seen welfare recipients who have multiple children so they

can get more welfare money. They see each child as a new check. These women are nothing

more than baby mills, pumping out kids so they can milk the system for a bigger welfare check

and more food stamps. While this is just plain wrong and a major abuse of the system, it

doesn’t really constitute fraud. While we need to make disincentives for welfare recipients

to have more kids, we also need to investigate welfare fraud whereby ineligible recipients are

receiving benefits or are using food stamps for items like beer or cigarettes. We’ve all seen

someone in the grocery store, usually with a couple of kids in tow, using food stamps to buy

beer or cigarettes DESPITE FEDERAL LAW AGAINST THIS. The stores don’t care, because they’re

not going to get caught because no one is investigating this type of fraud. As an alternative,

food stamp recipients can sell their food stamps or their food stamp card for cash which can

then be used for the purchase of cigarettes or alcohol. Is this really what we want food stamps,

funded by our tax dollars, to be used for? I don’t think so. In this regard, perhaps we should

reform the food stamp programme so that food stamp monies are used to fund local food

banks for welfare recipients. Each recipient can go to the food bank and receive their weekly or

monthly ration of foods—rice, canned goods, etc. It shouldn’t be hard to keep track of welfare

beneficiaries in a computer system to allocate the food.

In any event, welfare programmes (not including unemployment) cost taxpayers about $335

billion annually. Statistics on actual fraud are scant to be found, but there are estimates of fraud

ranging from 2-3%. I personally think this underestimates the level of fraud which is more likely

somewhere in the range of 5-7%. What does this mean in dollar terms? At 3%, welfare fraud

costs taxpayers about $10 billion annually. At 5%, welfare fraud costs taxpayers $16.7 billion

annually. So, let’s just say this costs the average worker somewhere between $48 and $81

annually.

Now, let’s consider the unemployment benefits fraud. According to the GAO, improper or

fraudulent unemployment benefit payments cost taxpayers about $4 billion annually or about

$19 per worker annually.

#4  Farm Subsidy Fraud

I’ve advocated for years that we need to end all farm subsidies completely

and permanently. Why should we be paying farmers to keep their fields fallow while we buy

produce from other countries. I have a serious problem that we pay farmers not to grow crops

then buy produce like lettuce, green onions, and strawberries from places like Mexico with very

lax standards for sanitation, etc. This is how we end up having salmonella and other sickness

outbreaks from eating tainted food brought in from other countries. I don’t think we even

grow pineapples in Hawaii anymore; they’re imported from Central and South America. We

spend something like $15 billion annually on farm subsidies. A GAO report from a couple years

ago indicated that the USDA paid over $1.1 billion in subsidies over six years to 170,000 dead

people! The GAO estimates that fraudulent farm subsidies cost taxpayer about $500 million

annually. While the fraudulent payments at this level cost each worker about $2 annually, the

entire programme costs workers about $72 annually.

#5  Foreign Aid

Did you know that the federal government spends over $50 billion annually on

foreign aid? That’s right $50 billion of your tax dollars goes to people overseas. For example,

this year’s budget includes $770 million for a Middle East and North Africa Incentive Fund. They

hate us. How about $2.4 billion for Pakistan? They hate us too. How about $600 million for

Educational and Cultural Exchange Programs? Really? How about $1.6 billion for Contributions

to International Organizations (such as the UN)? That’s a waste. And how about the $6 billion

for the Economic Support Fund that gives $289 million to South Sudan, $105 million to Liberia,

$50 million to Democratic Republic of Congo, $38 million to Sudan, $24 million to Zimbabwe,

$250 million to Egypt, $70 million to Lebanon, $38 million to Yemen, $141 million to Haiti, $15

million to Cuba. A lot of those countries hate us and we’re just throwing good money after bad.

Anything we give to those countries is likely being misappropriated to dictators, warlords, or

people who hate us. Democracy in those countries? We’re only fooling ourselves.

And how about $250 million for forgiving debt that other countries owe us? Anyone forgiving

our debt? Don’t think so.

Personally, I think we should be taking care of our own problems here in the United States and

our own people first. If private fundraising organizations want to raise private donations to give

to these countries and these causes, great! Otherwise, they can do without until we have all our

own affairs in order. The government shouldn’t be squandering our hard earned tax dollars on

other countries until our financial house is in order.

If you’re one of the 207 million workers in the US who are paying taxes, foreign aid costs you

about $242 annually. Does it make you feel good to know that this money is being given to

other countries that hate us? 

Keep an eye on the blog, I've got more to say!
~Digger