Illinois has identified over a million fraudulent unemployment claims during the pandemic, we learned last week. That’s quite a number considering that the total number of unemployed people in the state topped out last year at right about the same number, one million. And now the U.S. Labor Department inspector general’s office estimates that more than $63 billion has been paid out improperly across the country through fraud or error, according to the A.P. That’s roughly 10% of the total amount paid under coronavirus pandemic-related unemployment programs since March.
Yes, $63 billion total for the nation. And counting.
That got us thinking. How will this compare to history’s biggest scams?
It’s easy to find rankings of the biggest financial frauds, though they are not all consistent on the numbers. Most, however, give the title to the 2008 Bernie Madoff scheme. His investors lost $64 billion, or $78 billion adjusted for inflation. He therefore seems to still lead the pack, but it’s close.
What about the subprime mortgage fiasco in 2008? It’s not usually on the lists of scams because most of it was legal. Yes, there was mortgage fraud, but it’s hard to quantify and undoubtedly dwarfed by reckless but legal credit over-extension.
How about Charles Ponzi, whose name is synonymous with swindle?
Nah, peanuts. Ponzi duped people out of about $20 million in 1919. Even in today’s dollars, that’s just $300 million.
So there you have it. At $63 billion, pandemic unemployment insurance fraud is one for the records, and may end up on top.
“Hold on a minute,” you regular readers here are probably thinking. “You forgot about Illinois pensions. Just the five state-level pensions have unfunded liabilities of $140 billion and they are Ponzi schemes, so the title goes there.”
Sorry, pensions are legal.
-Mark Glennon
Expect no retraction or apology. This what they do.
The state’s existing buyout program for its own pensions is the precedent for Chicago, which should be a warning: Look out for similar exaggerated claims and shoddy analysis.
I thought that Wirecard was big but that’s only $3.5 billion missing. I watched a you-tube vid “Cold fusion, who controls our money” that is really scary. The paper and coin money in our wallets is only 3% of the money that’s been created.
I said this in a previous comment, but I just shook my head when I got dozens of mailings from IDES, some claiming that I had made unemployment claims. Many were different names, but at my address. I figured they’d catch on, and that I would get the letter that says “we’ve identified this as fraud.” But then one day I received four envelopes with pre-paid debit cards ready to go. They were for multiple different people, all at my address. PIN numbers, the whole lot. I sent them back. I would call IDES, but that’s a nightmare, as I… Read more »
Watabout Social Insecurity? It works just like a Ponzi – the first in get big gains, the last in get took. Oh, wait, that’s legal too.
What?-are you saying money doesn’t grow on trees?-jb and Joey Biden seem to think that it does!….and oh yeah, public sector unions think that also!!
Funny!!–Illinois pensions use the officially legal cash accounting / PONZIE MATH to dupe a hapless public. That’s the scam that should be made illegal
This is what happens under one party rule and control. As in California, the Democrats call all the shots, enact progressive legislation at taxpayer expense, and appear to have equally dysfunctional agencies.
Both states dished out billions in fraudulent unemployment claims, both refuse to address pension reform and both rely on public union financial backing to stay in office. Until this pattern is broken, both are also doomed. Both states desperately need some strong conservative voices.
PS I’m not a Republican.
The legal scams are more harmful than the illegal scams in Illinois.
The politicians are more dangerous than the criminals.
The government debt per person is far bigger at the Federal level than the state level, and that was before the trillions of COVID related debt.
Unfunded pensions and retiree healthcare just at the state level in Illinois are around $200B compared to $63B nationwide fraudulent unemployment claims.
Government exists only to grow government. One of the most effective ways to grow government is to hand out cash and create dependence. Government has no incentive to be sure the payments are performing the desired function or even going to the proper recipients. Money is going out, mission accomplished!