Why the trillions in COVID relief money led to billions in fraud

The inconvenient truth behind all this fraud and waste is that these government programs never should have been designed as they were. For example, while the federal government justifiably boosted state unemployment benefits at the beginning of the pandemic, it was irresponsible to enhance the benefits by $600 a week. As a result, 76% of the individuals who received such benefits were making more by not working than by working. It was also irresponsible to extend the program long after the economy reopened and resumed growing.

The same is true of the overly generous three rounds of $1,200, $600 and $1,400 individual payments paid to people who either already received the enhanced unemployment benefits or who never lost their jobs. Most recipients of these funds didn’t need them. In fact, only 15% of people who received the first round of checks said they had spent it or planned to spend it. And there were other benefits on top of these checks.

The end result was that, according to Marc Goldwein at the Committee for a Responsible Federal Budget, COVID-19 benefits were so generous that a family of five could have received $25,000 independently of the parents’ employment status. This non-fraudulent spending is now helping to fuel inflation.