Every holiday season, Senator Rand Paul honors the fictional Seinfeld holiday “Festivus,” an annual airing of grievances, with a report exposing how the federal government wastes taxpayers’ money. The libertarian-leaning Kentucky Republican just released his latest report for 2021 and its findings are even worse than expected.
And that’s saying something.
Senator Paul’s office documents $52.6 billion in waste, which is equivalent to wasting the taxes of 3.43 million Americans! The full 43-page report covers far too many egregious examples of government waste to list in one article. But here are 8 of the most outlandish ways the federal government wasted our money according to this year’s report.
1. Small Business Administration Paid Billions in Improper Loans and Feds Lost Billions to Unemployment Fraud
The federal government’s COVID-19 efforts were a scammer’s dream. The Paycheck Protection Program was meant to help struggling small businesses stay afloat during the pandemic, but it sent an astounding $4.29 billion to ineligible businesses or duplicate loans. It even sent $3.6 billion of that money to businesses explicitly on the Treasury Department’s “Do Not Pay” list—which includes known scammers—yet, it didn’t bother to check!
So, too, countless billions were lost to unemployment fraudsters during the expanded pandemic benefits system.
2. Baltimore School Claims Millions in Federal Funding for Fake Students That Don’t Exist
Apparently, the federal government gives out more than $9,000 in federal funding per student in Baltimore, Maryland. One school evidently decided to take advantage of this system, claiming $1.27 million in funding for 140 students who were not actually enrolled and whose “whereabouts were unknown.” According to the report, “A City of Baltimore investigation found some administrators were changing grades and padding enrollment with ‘ghost students’ who were not actually attending the school in order to get more funding.”
3. NYC Wastes Millions in Federal COVID Funds on “City Arts Corps”
The federal government’s multi-trillion-dollar COVID-19 “stimulus” efforts flooded the coffers of state and local governments with more money than they knew what to do with. This resulted in many absurdly wasteful programs, like one in New York City where Mayor Bill de Blasio used federal taxpayer money to set up a “City Arts Corps” paying artists to create public art and “resurge the cultural scene.”
4. Billions Wasted in Afghanistan
Senator Paul’s report documents billions wasted on jaw-droppingly dumb expenditures in Afghanistan. The US reportedly allowed foreign nations to use military aircraft for free at a total expense of $773 million and spent $549 million on planes that were later scrapped and sold for parts. The federal government also apparently wasted $2.4 billion on constructing buildings in Afghanistan that were left unused as well as $88 million invested in building irrigation systems for Afghan farmers—only 2.7 percent of which were later used properly.
5. Millions Spent on Border Security—In Other Countries
There’s a hot debate in American politics about how much money the federal government should spend securing our southern border. Yet apparently we are already spending hundreds of millions on border security—in other countries.
“$250 million of your taxpayer dollars are going to building borders in Jordan, Lebanon, Egypt, Tunisia, and Oman,” the report notes. “While Americans may be divided on how to solve the crisis at the U.S.-Mexico border, we should all agree that using our taxpayer money to fix someone else’s border is not the best idea.”
6. $150,000 Sending Random South Koreans on Vacation
Many Americans could use a vacation but can’t afford one right now. Well, rest assured that the federal government is using their tax money to send random South Koreans on climate change vacations.
“Partnering with the United States Agency for International Development (USAID), the United States Embassy in Seoul is allocating up to a $150,000 grant to send ten Koreans aged 15-30 to Washington, D.C. for two weeks to learn about climate change activism,” the report notes.
7. Hundreds of Thousands to Fatten Up Eels
The Food and Drug Administration (FDA) reportedly gave $337,500 to a Canadian company to fatten up eels for human consumption in an effort to boost the… eel market?
“This is corporate welfare, driven by somebody at the FDA who must really like eating eel,” the report notes. “Someone should remind the FDA that there are other fish in the sea.”
8. Billions Lost in Improper Social Security Payments
At least the federal government is carefully stewarding our retirement money, right? Yeah, about that…
According to Senator Paul’s report, the Social Security Administration made “100,766 overpayments totaling nearly $4.2 billion that may not be fully recouped until 2049. Of this, the Administration completely deleted and could not account for over $1.2 billion due to an error in their system.”
This is Just the Tip of the Iceberg
Rest assured, this list is hardly exhaustive. The full depths of waste across trillions and trillions of dollars in federal expenditures can’t be captured by one report or one senator’s office. The above items and $52+ billion are just the tip of the iceberg, indicative examples that remind us how wildly irresponsible the government is with our money. But as Nobel-prize-winning economist Milton Friedman famously explained, that’s a feature of the government, not a bug.
Why? Friedman identified four ways money can be spent. We can spend our money on ourselves, in which case we have every incentive toward frugality and quality assurance. We can spend our money on someone else or someone else’s money on ourselves, like buying gifts or spending a gift card. In either scenario, some incentive toward frugality still exists.
Yet Friedman outlined a fourth scenario, wherein someone spends other people’s money on other people. In that scenario, there’s really no incentive at all to spend frugally or wisely. And that scenario perfectly describes most government programs.
The takeaway here is clear. There’s only one way to get the government to waste less of our money, and that’s to give them a lot less of it in the first place.
Brad Polumbo (@Brad_Polumbo) is a libertarian-conservative journalist and Policy Correspondent at the Foundation for Economic Education.
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