As CNN notes, federal and state governments overpaid unemployment benefits by $14 billion in 2011 — or approximately 11 percent of all benefits paid. The overpaid benefits went mostly to ineligible people, like those who had dropped out of the job hunt, quit voluntarily, or filed unemployment claims after returning to work. Not only was there fraud on a vast scale, but governments completely failed to detect it. Indiana made more “improper payments” than proper ones. The only federal program with more improper payments than unemployment insurance was the School Lunch Program.
Last month, more people went on social security disability than found a job. High real unemployment is masked by skyrocketing disability claims, as demoralized unemployed people permanently leave the labor force to go on the dole, citing emotional ailments such as depression to qualify for social security disability payments.
Unemployment benefits are not the only thing that’s being paid out to people who don’t deserve them. Even wealthy people are collecting food stamps in some states due to loosened eligibility requirements. There are now a record-breaking 47 million people on food stamps. To collect federal subsidies that reward states for increasing the food stamp rolls, some states are deliberately qualifying for food stamps millions of people who are not poor, but who are lucky enough to receive small amounts of state housing, heating, or other subsidies designed to qualify them for federal food stamp entitlements. The Obama administration has cracked down on states that attempted to reduce food stamp fraud, as James Bovard noted earlier in The Wall Street Journal. Food stamp fraud costs America billions of dollars.