A Philosopher's Blog

Poor Fraud

Posted in Business, Ethics, Law, Philosophy, Politics by Michael LaBossiere on January 17, 2014
Fox News Channel

Fox News Channel (Photo credit: Wikipedia)


One stock narrative is the tale of the fraud committed by the poor in regards to government programs. Donald Trump, for example, has claimed that a lot of fraud occurs. Fox News also pushes the idea that government programs aimed to help the poor are fraught with fraud. Interestingly enough, the “evidence” presented in support of such claims seems to be that the people making the claim think or feel that there must be a lot of fraud. However, there seems little inclination to actually look for supporting evidence—presumably if someone feels strongly enough that a claim is true, that is good enough.


The claim that the system is dominated by fraud is commonly used to argue that the system should be cut back or even eliminated.  The basic idea is that the poor are “takers” who are fraudulently living off the “makers.” While fraud is clearly wrong, it is rather important to consider some key questions.


The first question is this: what is the actual percentage of fraud that occurs in such programs? While, as noted above, certain people speak of lots of fraud, the actually statistical data tells another story.  In the case of unemployment insurance, the rate of fraud is estimated to be less than 2%. This is lower than the rate of fraud in the private sector. In the case of welfare, fraud is sometimes reported at being 20%-40% at the state level. However, the “fraud” seems to be primarily the result of errors on the part of bureaucrats rather than fraud committed by the recipients. Naturally, an error rate that high is unacceptable—but is rather a different narrative than that of the wicked poor.


Food stamp fraud does occur—but most of it is committed by businesses rather than the recipients of the stamps.  While there is some fraud on the part of recipients, the best data indicates that fraud accounts for about 1% of the payments. Given the rate of fraud in the private sector, that is exceptionally good.


Given this data, the overwhelming majority of those who receive assistance are not engaged in fraud. This is not to say that fraud should not be a concern—in fact, it is the concern with fraud on the part of the recipients that has resulted in such low incidents of fraud. Interestingly, about one third of fraud involving government money involves not the poor, but defense contractors who account for about $100 billion in fraud per year. Medicare and Medicaid combined have about $100 billion in fraudulent expenditures per year. While there is also a narrative of the wicked poor in regards to Medicare and Medicaid, the fraud is usually perpetrated by the providers of health care rather than the recipients. As such, it would seem that the focus on fraud should shift from the poor recipients of aid to defense contractors and to address Medicare/Medicaid issues. That is, it is not the wicked poor who are siphoning away money with fraud, it is the wicked wealthy who are sucking on the teat of the state. As such the narrative of the poor defrauding the state is a flawed narrative. Certainly it does happen: the percentage of fraud is greater than zero. However, the overall level of fraud on the part of the poor recipients seems to be less than 2%. The majority of fraud, contrary to the narrative, is committed by those who are not poor. While the existence of fraud does show a need to address that fraud, the narrative has cast the wrong people as the villains.


While the idea of mass welfare cheating is thus unfounded, there is still a legitimate concern as to whether or not the poor should be receiving such support from the state. After all,  even if the overwhelming majority of recipients are honestly following the rules and not engaged in fraud, there is still the question of whether or not the state should be providing welfare, food stamps, Medicare, Medicaid and similar such benefits. Of course, the narrative does lose some of its rhetorical power if the poor are not cast as frauds.


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26 Responses

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  1. TJB said, on January 17, 2014 at 9:53 am

    Who is making the claim “that the system is dominated by fraud”? How can you argue against a position when you do not establish that anyone actually holds the position you are attacking?

    • magus71 said, on January 17, 2014 at 9:57 am

      A common meme he promotes.

    • WTP said, on January 17, 2014 at 11:11 am

      It’s called a “straw man”. But this can’t be one because, as Mike has repeatedly stated, he doesn’t make “straw man” arguments. He just doesn’t.

      Was thinking to myself last night, Mike hadn’t posted anything annoyingly deceptive or flat out stupid lately. Leopards, spots, YMMV.

      • magus71 said, on January 17, 2014 at 2:30 pm

        I had that exact argument with him a long time ago on one of his posts. I told him he was creating arguments by conservatives that they did not actually have.

    • Michael LaBossiere said, on January 17, 2014 at 2:26 pm

      So, we are all agreed that there is very little fraud on the part of the recipients of social programs?

      If so, we can thus dismiss any arguments for reducing social support that are based on claims of significant fraud. As such, my work here is done. At least in regards to that objective.

      Thus, the question that remains is whether or not there are compelling moral arguments to reduce social support on other grounds. That is, given the agreement that fraud is minimal, perhaps the arguments would need to focus on why the recipients do not merit the aid. Or, alternatively, utilitarian arguments could be given as to why people are better off without or with less food stamps and unemployment benefits.

      • magus71 said, on January 17, 2014 at 2:39 pm

        When the next riot occurs and people start stealing loaves of bread instead of XBoxs, then I’ll advocate for more social welfare.

        Of course, the small aspect of social welfare that you’re focusing on does not touch the totality of the problems it creates. Yes, the fraud is small. And there is still too much welfare.

        • Michael LaBossiere said, on January 17, 2014 at 2:48 pm

          Now, when you say that fraud is small, do you mean 1) that most people actually deserve the support and hence are not engaged in fraud, 2) that most people are merely following the laws and hence technically not engaging in fraud or 3) something else?

          After all, there seems to be a possible tension between claiming fraud is small, yet there is something going wrong with social welfare. As noted above, I suspect you think that the people are following bad laws. To use an analogy, when slavery was legal, slavers were following the law, yet acting immorally. Do you think the same about welfare? That is, people are mostly following the law, but the law is immoral in this regard?

          • magus71 said, on January 17, 2014 at 2:58 pm

            I think the laws are bad, but people are bad if they do things merely because they are permissible by law but still immoral. Illegitimacy hurts children. As you know, bad people need rules andf the threat of punishment to force them to do what is right; good people do what is right regardless if a rule tells them to or not. Money will not solve most of the problems of a disintegrated family. The government pays farmers subsidies to encourage them to grow certain foods. And it works. Why do we think it’s any different for pregnancies?

          • T. J. Babson said, on January 17, 2014 at 4:38 pm

            “If so, we can thus dismiss any arguments for reducing social support that are based on claims of significant fraud.”

            Yes. And even if one believes there is “significant” fraud (already reduced from “dominated by fraud”) that is not really an argument to trim back welfare, but to better enforce the law.

            The main argument for welfare reform is that instead of a temporary measure to help people get back on their feet, for too many people it has become a permanent feature in their lives.

            Mike, did you ever see the British sitcom “Keeping Up Appearances”? Remember Hyacinth’s brother-in-law Onslow?

            Onslow is everything his sister-in-law Hyacinth despises, and threatens her social-climbing efforts. He is an uncouth and unemployed man who earns his money through betting on horses, spends his time drinking beer, eating crisps and smoking cigarettes, and watching television. On many occasions he watches horse racing, and one of the repeated elements of comedy is his method of operating his ancient TV set by banging on it. Onslow describes himself as “work-shy, bone idle, and out of condition” and has been known to ponder “the inconvenience of working.” Whenever Onslow is unpleasantly surprised by something, such as running out of beer or being insulted, he usually retorts with his sarcastic catchphrase: “Oh, nice!”. He habitually wears a baseball cap with the FH logo of New Zealand earth-moving and road construction company Fulton Hogan. He also on occasion wears a Green Bay Packers t-shirt with the sleeves cut off.

            Although he watches television endlessly, Onslow also reads substantially, especially in the bedroom (where he never changes out of the usual vest and jeans he wears throughout the day), and considers himself something of an intellectual. Onslow is surprisingly well-read and frequently raises technical or philosophical issues in normal conversations. He is seen many times reading The Principles of Condensed Matter Physics, Life Among The Primitives, A Brief History of Time, The Financial Times, and The Racing Post. He also watches Open University programmes.


      • apolloniani said, on January 17, 2014 at 2:54 pm

        Socialism Is Mere Pretext For Extermination And Genocide

        Mike: it’s simple–the free Market is the way to go, and it’s the only rational, hence “moral” system. The free market serves the people best, takes care of the poor best–hands-down. Whether a person deserves charity is an individual decision to be made by individuals on individual basis, obviously.

        Any other system (aside fm freedom) is dictatorship, and it never works–indeed, ALWAYS works to the detriment of people and poor. It’s not really even a matter of “left” vs. “right,” it’s actually life vs. death, reason vs. SATANISM. The argument against the free market is argument against freedom and reason and in favor of DEATH DEATH DEATH, extermination, and genocide.

        U gotta start to get the idea the ONLY proper “morality” is what’s rational, founded in reason.

      • WTP said, on January 17, 2014 at 3:11 pm

        This is so typical of Miike’s BS style of argument. Call him on the claim that “that the system is dominated by fraud” and he comes back with the childish response

        So, we are all agreed that there is very little fraud on the part of the recipients of social programs?

        If so, we can thus dismiss any arguments for reducing social support that are based on claims of significant fraud. As such, my work here is done. At least in regards to that objective.

        As if no gradation exists between the extremes. Such is not worthy of a older teenager yet here is Mike, a “man”, half a century old mind you, with a PhD in philosophy from THE Ohio State University playing silly word games. Were he a European douche like a Laura Penny or Amanda Marcotte or such, living off some foreign tax payers’ dime or educating their hapless fools, I could laugh at this. Try as I might, the sad truth that this is what “mature” “educated” thinking leads to in THIS country, in MY state of residence is pathetic.

        • apolloniani said, on January 17, 2014 at 3:18 pm

          WTP: haven’t u figured out by now?–purpose of public edjumacation is to keep people stupid, keep them diverted/distracted. The truly talented are washed-out, the ones given the credentials are tried and test, willing tools. “Philosophy” professors are skilled in subverting arguments in numerous ways, never doubt. It isn’t called “thought-control” for nothing.

    • apolloniani said, on January 17, 2014 at 2:44 pm

      Un-Questionably, There’s Fraud–BUT Where Does It Really Start, And What’s The Essence?

      TJB: u’re a nit-picker. Of course u’re right so far as demanding the thesis be substantiated w. specific details, but I’d say Mike is QUITE correct for the general assumption and under-lying issues. There surely are some people, though not as many as years ago, who complain about fraud on part of some “poor” folk.

      After all, things are SOOOOOOOO horrible today, economically, and getting WORSE, it’s tough to blame folks as they find themselves relying upon the “social system.” Further, people need to realize USA is DELIBERATELY being destroyed–“de-industrialized,” the American people impoverished–and it’s part of AGENDA-21 and of a piece w. ObamaCare DEATH panels, never doubt. It’s the culture of death built upon the empire-of-lies (“noble lies,” according to Leo Strauss, mentor of all-powerful “neo-cons”).

      Additionally, don’t fail to observe the entire stinking, thoroughly corrupted structure of present USA economy is purest FRAUD, FRAUD, FRAUD, beginning w. the US Federal Reserve Bank (Fed) COUNTERFEIT scam (see RealityZone.com, Mises.org, and LewRockwell.com for expo on Fed) at the top, the USA being totally taken over by criminals and monopolists, they being much one and the same, never forget.

      So why would anyone stop to worry about the penny-ante fraud going on w. welfare and stuff at the lower-level of society when, BY FAR, most of the fraud takes place at the top–ever hrd of “corp. welfare”?–Ho ho ho. Do u remember what happened back in 2008 when the “too big to fail” banks were bailed out w. trillions of dollars?

      So we see that, YES, there’s fraud taking place, but it’s all over, far more at the top than at the lower levels. And the only reason the shills at FOX (a bunch of scummy traitorous neo-cons who are for ISRAEL FIRST, never forget) yelp about “welfare fraud” is to distract and divert fm the REAL fraud that’s going on at the top. So people of USA ought to take the pt. regarding fraud seriously, BUT the essence of the problem lies elsewhere than w. the poor–OBVIOUSLY.

  2. T. J. Babson said, on January 17, 2014 at 2:05 pm

    This is from NPR, well known as a bastion of conservative thought.

    Jahleel Duroc (pictured above) is gap-toothed, 10 and vibrating with enthusiasm. He’s excited to talk to someone new, excited to show me his map of his neighborhood in the Bronx. He’s disabled in the eyes of the government because he has a learning disability.

    “I like school,” he told me. “My favorite periods are math and science and art, and lunch and recess and snack … social studies and writing are my favorite.”

    His favorite thing about school, in other words, is everything.

    When you are an adult applying for disability you have to prove you cannot function in a “work-like setting.” When you are a kid, a disability can be anything that prevents you from progressing in school. Two-thirds of all kids on the program today have been diagnosed with mental or intellectual problems.

    Jahleel is a kid you can imagine doing very well for himself. He is delayed. But given the right circumstances and support, it’s easy to believe that over the course of his schooling Jahleel could catch up.

    Let’s imagine that happens. Jahleel starts doing better in school, overcomes some of his disabilities. He doesn’t need the disability program anymore. That would seem to be great for everyone, except for one thing: It would threaten his family’s livelihood. Jahleel’s family primarily survives off the monthly $700 check they get for his disability.[5]

    Jahleel’s mom wants him to do well in school. That is absolutely clear. But her livelihood depends on Jahleel struggling in school. This tension only increases as kids get older. One mother told me her teenage son wanted to work, but she didn’t want him to get a job because if he did, the family would lose its disability check.

    I haven’t taken a survey or anything, but I’m guessing a large majority of Americans would be in favor of some form of government support for disabled children living in poverty. We would have a hard time agreeing on exactly how we want to offer support, but I think there are some basic things we’d all agree on.

    Kids should be encouraged to go to school. Kids should want to do well in school. Parents should want their kids to do well in school. Kids should be confident their parents can provide for them regardless of how they do in school. Kids should become more and more independent as they grow older and hopefully be able to support themselves at around age 18.

    The disability program stands in opposition to every one of these aims.


  3. magus71 said, on January 17, 2014 at 2:46 pm

    A long time ago, I had a girlfriend who said she wanted to have a baby. I told her that because I was still in college I thought it was a very bad financial idea. She offered to apply for welfare when the child was born and withhold my name as father from the state so she could get more money. She was dead serious. This is not fraud, statistically speaking. But this kind of activity damages many lives, and is quite prevalent. Welfare incentives bad behavior. If all welfare in America went away, no one would starve and many evils would become less profitable.

    • WTP said, on January 18, 2014 at 10:12 am

      As Magus states, it’s not just the technical fraud. There’s also the fast and loose Mike plays with the facts, blaming food stamp fraud on “businesses”, which is a big bag Mike puts things in when he wants to swing at something. Many of these “businesses” are not true businesses in that they would not exist if not for the fraud they commit. And in order for these “businesses” to commit fraud, they almost always have willing accomplices in the recipients as part of a kick-back scheme. Then of course he blames the “bureaucrats” for their “mistakes” when much the same is going on as with the businesses and all the while totally ignoring the responsibility of the recipients to not accept that which they are not qualified to receive. This is all typical of Mike’s arguments and ivory tower perspective on the world. But I digress from what I started to post here.

      As Magus states (let’s try that again), there are a huge number of people receiving aid, especially in the form of disability fraud. I believe I’ve related here the husband of a sister-in-law who has been out on disability for a bad back for about 25 years now. He “can’t” work. Hell, I’ve got a bad back. I work to pay taxes to support his sorry ass. Now the guy has a daughter who just got herself knocked up by a member of a certain minority group not known for having a good work ethic. Constant posts on FB show no evidence of them even being together, that either one of them have a job, and from what I understand through the family grape vine, they’re all on the dole. This sh*t gets generational. Meanwhile her brother, who grew up in the same house and has some of the same problems, did manage to get an engineering degree and AFAIK supports himself.
      This disability sh*t is very frustrating to me. Two co-workers of mine, one who is more of a close personal friend, are blind. They work as software developers/engineers and are quite good at what they do. Why do they work and get taxed to support these worthless b*st*rds? It’s criminal. I’m going out for burgers and beer tonight with the one I’m more friends with. His wife works with the disabled. From what he tells me, and what little I’ve discussed it with her, she is constantly dealing with people who just want to be classified, and many who already are classified, as disabled.. Often it’s a “learning” disability, which according to my friend’s wife is mostly a disability more in the “try” department than the “can” department. It’s terrible for the morale of people who want to help those who genuinely need help and could be productive members of society. It drains resources and stresses the system.

      What really frustrates me about this subject is that is more often than not either overtly stated or covertly implied that it’s a racial thing. Don’t know if I posted this here before, but take some time to read this:


      an excerpt:
      The first person I encounter is Jimmy — I think he’s called Jimmy; there is so much alcohol and Kentucky in his voice that I have a hard time understanding him — who is hanging out by the steps of the local municipal building waiting for something to happen, and what happens today is me. Unprompted, he breaks away from the little knot of men he is standing with and comes at me smiling hard. He appears to be one of those committed dipsomaniacs of the sort David Foster Wallace had in mind when he observed that at a certain point in a drunk’s career it does not matter all that much whether he’s actually been drinking, that’s just the way he is. Jimmy is attached to one of the clusters of unbusy men who lounge in front of the public buildings in Booneville – “old-timers with nothing to do,” one observer calls them, though some of those “old-timers” do not appear to have reached 30 yet, and their Mossy Oak camouflage outfits say “Remington” while their complexions say “Nintendo.” Mossy Oak and Realtree camo are aesthetic touchstones in these parts: I spot a new $50,000 Ram pickup truck with an exterior as shiny as a silver ingot and a camouflage interior, the usefulness of which is non-obvious.

      Read the whole thing. And this is right in line with my own observations in the wealthier part of Appalachia where I have spent considerable time. I worked a food pantry up there for a while and it sickened me to watch food get handed out to perfectly able people who lacked the self-interest to wash themselves or clean the piles of trash out of their cars. The bottom line is, you can’t force people to care for themselves. It has to come from within. And it all starts with some tough love.

      • T. J. Babson said, on January 18, 2014 at 10:25 am

        Thoughtful post, WTP.

        • WTP said, on January 18, 2014 at 12:40 pm

          Well I tried to work something in there about the Federal Reserve and the dirty Kikes but it just didn’t flow right.

          • apolloniani said, on January 18, 2014 at 1:48 pm

            WTP: u might have started w. idea the ENTIRE CULTURE is corrupt theme, as I tried to pt. out. “Flowing”?–u gotta think, making use of reasoning, founded on observations. Sure, there’s fraud, but where does it start?–and who is MOST guilty, by far?–it sure ain’t the “poor.” I follow Spengler and “Decline of the West.” If u want to bring in Jews, this can be done, but u need to know something about them, right?

      • magus71 said, on January 19, 2014 at 8:07 am

        Mike believes this type of thing is very rare. I do not. What he has to realize is that there are entire portions of cities populated by people with criminal mind sets. Part of that mind set tells them that they should get over on the system. This culture is very good at communicating loop holes, so that uneducated, un -philosophical people become extremely clever. They know the right things to say and do to get the system to give them stuff.

        Cops know that there are certain streets in cities where around 90% of the people that live there are criminals. One can very easily generalize about these streets and be correct in assuming that most of these people are willfully unemployed, getting government assistance, and have no intent of getting off government assistance.

        We have to be very careful about removing natural feedback loops. This is the case for the elite and poor alike. Imagine, WTP, an organization like the Army, in which officers (the elite) are not subject to the feedback loops of evident in most businesses or in everyday life. Things like “the bottom line”, a metric that can tell at some level at least how well the boss is doing things, does not exist in the Army. Neither do measurements like employee retention (soldiers can’t quit the Army before their contracts are up), and officers have so much power that many people will not tell them they are wrong even if it’s obvious (Emperor with no clothes syndrome). What’s to prevent officers from becoming horrible bosses, today’s outstanding moral climate?

        To get back on track, removing all discomfort caused by unemployment is a very bad thing. People on welfare should never be as comfortable as those who work even a $40000 a year job, but many are.

        • WTP said, on January 19, 2014 at 11:10 am

          Ahh, Magus…but those cops are “profiling”, it’s “racism”, yadda-yadda-yadda. Yet the same pattern can be found in the White Ghettos described in my link.

          So last night’s burgers and beer discussion, I asked my friend what kind of assistance he is eligible for. Unfortunately, he mistook my question as to what he was receiving. The answer to that was “none”. In the past he of course had much assistance in training and schooling and initially as a child in the “how to be blind” skills. But since starting work and getting married, he’s had none. And he made the point that he’s fairly certain that the taxes he’s paid more than cover for what he received in services. Way down inside, I damn near wanted to cry. Meanwhile other people “get hurt” at work or elsewhere and because of their “bad back” or “trick knee” or “learning disability” (and at one time alcohol or drug dependence) and thus are disabled and my friend is taxed to support them. On top of that, he’s got an older brother (older by 6-7 years) whose family is worthless, system-playing connivers, who hits him up for money. These people don’t need financial help. They need a kick in the ass and the clear understanding from society that they are EXPECTED to support themselves. No cheesy excuses like The Man Is Keeping Me Down or hard luck stories perpetrated by philosophers, movie makers, novelists, journalists, etc. are going to help them. Something has to come from INSIDE. When people like those philosophers, etc. provide them psychological “comfort” with their bleeding hearts, they are not helping them. The problem is the philosophers, etc. will not stop because they get reinforcement and self-worth from thinking they are doing God’s work or some such. Only when we make it clear to such people that they are not helping, that such actions will not provide them comfort either financially nor emotionally, will such nonsense be brought under control. I was going to say “will such nonsense end” but it never will, and to some extent never should. A society needs soft-hearted individuals at times, in places. But this crap has gotten way out of hand.

          Hmm…I was going somewhere in the direction of the Army with this in reference to Magus’s post, but I can’t remember what the path was. Part of what I wanted to say was, and again coming from a civilian lifer, I think an army at peace or at war must have well defined objectives or you end up with the sort of bumblef*k leadership you describe. Some of the problems, the two-year commitments, etc. are going to have to come with the territory. I suspect that much of the problems you see is driven by the too-many-chiefs-not-enough-indians dilemma. That and the complexities of needing a large standing army for possible threats such as China or the Norks or possibly even the Russians (all of which I think are over stated, but I could be wrong) and the pin-prick sort of effort that is need to fight insurgencies, terrorists, small militant groups, etc.

  4. magus71 said, on January 17, 2014 at 2:49 pm

  5. magus71 said, on January 17, 2014 at 3:08 pm

    Victims of the system? Or is it a bad system enabling bad people?

    • WTP said, on January 19, 2014 at 12:59 pm

      Mike has repeatedly argued here against virtually every point in this video. And iirc, he has abandoned said arguments once the going (for his POV) got tough. How will any of this ever change?

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