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$2.2B Stolen Via Unemployment Benefits Fraud

Via the Wall Street Journal:

Fraud in Unemployment Benefits

By Phil Izzo | April 27, 2013

$2.2 billion: Amount of unemployment benefits paid to people who were employed and earning wages in 2011.

Unemployment insurance keeps people in the labor force and acts as an important bridge between jobs, but billions are spent on undeserved overpayments.

More than $108 billion was paid out in unemployment benefits in 2011, and the Department of Labor estimates that just under 3% of that was due to fraud. The most common type of overpayment is what’s called concealed earnings fraud, according to David L. Fuller, B. Ravikumar and Yuzhe Zhang in an article for the St. Louis Fed. Individuals who are employed but still collecting benefits account for two-thirds of all fraud cases, according to the authors.

The total amount paid out in concealed earnings fraud was about $2.2 billion in 2011, the most recent year for which data are available, the St. Louis Fed article states

The St. Louis Fed article offers details on which groups are concealing earnings and collecting benefits. The authors note that fraud is most common among the lowest earners, but the larger dollar amounts come from those with higher payments. “Given limited resources to deter fraud and to recover overpayments, the unemployment insurance system faces a trade-off between the number of individuals versus the dollar amounts,” the authors conclude.

But collecting unemployment benefits while working under the table is just one of the many reasons why we now have a $2 trillion dollar underground economy, as the Washington Post mentioned in passing last week:

The $2 trillion shadow economy is the recession’s big winner

By Brad Plumer | April 23, 2013

A 2011 paper [a pdf file] Richard Cebula and Edgar Feige [who have been investigating the so-called underground, or gray, economy for thirty-five years] estimated that as much as “18-19 percent of total reportable income is not properly reported to the IRS.” That’s as much as $2 trillion in underground economic activity, with about $500 billion in taxes that aren’t being paid to the government…

That’s double the amount in 2009, according to a study by Friedrich Schneider, a professor at Johannes Kepler University in Linz, Austria. The study said the shadow economy amounts to nearly 8 percent of U.S. gross domestic product." …

So this is one more feather in Obama’s cap. And one more indicator that the US is rapidly becoming a third world nation. Which seems to be the plan.

Think of how many people are getting paid in cash to 1) avoid paying taxes, and 2) to keep their various government benefits, such as unemployment, food stamps, welfare, WIC, subsidized housing, subsidized heating and cooling, earned income credit… The list is endless.

This article was posted by Steve on Monday, April 29th, 2013. Comments are currently closed.

2 Responses to “$2.2B Stolen Via Unemployment Benefits Fraud”

  1. Liberals Demise says:

    Uh…..where in the hell is aaaall the money for “shovel” ready jobs that weren’t so shovel ready?

    • GetBackJack says:

      In Egypt, Syria, Lebanon, Turkey, Pakistan, China, the Philippines, Mauritania … you name it. Billions and billions of $ given out by your government to other nations, labeled euphemistically “Foreign Aid”.

      Then there’s a trillion or so handed out by the Administration to shovel ready companies in the Green Industry. The shovel was used to bury the business and siphon off hundreds of billions to cronies who in turn no doubt looped a lot of the money back to the Democrat Party … used to poison the world against the Republicans.

      Then there’s Medicare and welfare fraud.
      Then there’s Joe Biden renting out his own property to the Secret Service for his protection.

      It’s a long list.

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