Why Stopping Fraud Still Isn’t Enough – OpEd
Historically speaking, Uncle Sam isn’t very good at managing money. Because the politicians and bureaucrats who run the U.S. government aren’t good at managing money, they’ve opened the door to massive losses through fraud. In 2024, the GAO estimated that from 2018 through 2022, the U.S. government lost between $233 billion and $512 billion dollars per year to fraudsters.
These are not small amounts of money. In 2015, the federal government’s entire budget deficit for the year was $442 billion. Based on the GAO’s estimates, it’s possible the U.S. government could have balanced its budget that year if it had avoided losses from fraud.
Would that even be possible today?
Unfortunately not. After 2020’s coronavirus pandemic opened the spending taps, politicians and bureaucrats became addicted to excessive spending. The U.S. government is running budget deficits in the trillions as a result, years after the pandemic crisis ended. In 2026, the CBO projects the U.S. government will run at least $1.85 trillion in the red.
If fraud comes in at the low end of the GAO’s estimates, it would reduce the federal deficit by 12.5%. At the high end, it would reduce the U.S. government’s budget deficit by 28%. Either way, reducing its fraud losses to zero would not be enough to eliminate 2026’s budget deficit.
Fraud, however, is a big enough problem that focusing on reducing it will make a noticeable difference to the federal government’s fiscal health. The antifraud initiatives the government is now taking are long overdue.
- This article was published at Indpendent Institute
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