2010 October 03 Sunday
Cal Welfare Payments Funding Gambling And Cruises

The Los Angeles Times poked in some California state data on where welfare cash cards get used and found some of the cards get used on cruise ships, in Miami, and on Hawaiian islands. But Las Vegas (lost wages, or lost welfare) is the number one for out-of-state spending destination by welfare recipients.

More than $69 million in California welfare money, meant to help the needy pay their rent and clothe their children, has been spent or withdrawn outside the state in recent years, including millions in Las Vegas, hundreds of thousands in Hawaii and thousands on cruise ships sailing from Miami.

Penny-wise, pound-foolish budget cuts for welfare fraud investigation are making the situation worse.

An anti-fraud unit in Orange County, which won praise from state officials last year for saving the state millions, has since had to slash its budget and lay off 15 investigators, said Paul Bartlett, commander of the county district attorney's Bureau of Investigation. Those cuts saved $900,000 in operating expenses but allowed "an estimated $9.6 million in suspected fraud payments out the door," according to an Orange County Grand Jury report released in May.

For every jurisdiction in America I'd like to know the marginal dollar amount saved per dollar spent on welfare fraud investigation. How many places have a ratio greater than 1? Ditto for Medicare fraud investigation and other forms of investigation of fraud against government. Do governments generally underspend on efforts to prevent fraud?

Share |      By Randall Parker at 2010 October 03 11:03 PM  Economics Entitlements

Lou Pagnucco said at October 7, 2010 10:19 AM:

I think determining that ratio would be impossible, since that data would be intentionally obfuscated.

I am in favor of providing honest people experiencing extreme hardship with welfare, but those who scam the system should be severely penalized - they are like thieves who steal from blind beggars' cups.

If those convicted were forced to repay 50x the amount they spent on cruise ships, or in Vegas, fraud would plummet.

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