John Gast, American Progress (and other titles), 1872, most frequently seen in chromolithograph form inside cigar boxes.
Walter Russell Mead starts a new insightful essay which argues that the Progressive, Blue State-politics ideas revolving around suburbia, a manufacturing economy, a constantly-expanding regulatory regime and welfare state pertain to rapidly vanishing world, destined to follow the Indians and the buffalo, and the family farm and homestead into America’s past.
The frustration and bitterness that fills American politics these days reflects the failure of our current social, political and economic institutions and practices to deliver the results that Americans want and expect. It’s comparable to the frustration and fear that swept through the country in the late 19th and early 20th century as the first American dream – that every family could prosper on its own farm – gradually died….
Our political battles today reflect the same kinds of frustrations we saw in the old populist era. Many cannot fathom another and “higher” form of the American Dream beyond the old crabgrass utopia. They want to turn back the clock and restore the old system because they don’t know of anything else that will work. ...
It is, of course, a very similar situation today. The forces ripping up our old social model are too powerful to beat. That is not because the rich bankers or global multinationals are engaged in a conscious conspiracy of rip-offs and oppression (though, frankly speaking, big business does sometimes engage in exactly that). It is because the forces ripping up the social model are deeply implanted in the nature of the economic system — and that system is a reflection of the propensities in human nature which we cannot and perhaps should not overcome.
There is another important similarity, one often overlooked in the pessimism, anger and anxiety provoked by the inexorable decline of the “blue social model” that shaped America in the 20th century — just as it was overlooked 100 years ago.
Mark Steyn takes at look at America’s situation at the beginning of the New Year, and concludes that the welfare state is self-destructing, but the establishment elites would rather save the planet than balance the national books.
At the end of 2011, America, like much of the rest of the Western world, has dug deeper into a cocoon of denial. Tens of millions of Americans remain unaware that this nation is broke — broker than any nation has ever been. A few days before Christmas, we sailed across the psychological Rubicon and joined the club of nations whose government debt now exceeds their total GDP. It barely raised a murmur — and those who took the trouble to address the issue noted complacently that our 100 percent debt-to-GDP ratio is a mere two-thirds of Greece’s. That’s true, but at a certain point per capita comparisons are less relevant than the sheer hard dollar sums: Greece owes a few rinky-dink billions; America owes more money than anyone has ever owed anybody ever.
Public debt has increased by 67 percent over the last three years, and too many Americans refuse even to see it as a problem. For most of us, “$16.4 trillion” has no real meaning, any more than “$17.9 trillion” or “$28.3 trillion” or “$147.8 bazillion.” It doesn’t even have much meaning for the guys spending the dough: Look into the eyes of Barack Obama or Harry Reid or Barney Frank, and you realize that, even as they’re borrowing all this money, they have no serious intention of paying any of it back. That’s to say, there is no politically plausible scenario under which the 16.4 trillion is reduced to 13.7 trillion, and then 7.9 trillion, and eventually 173 dollars and 48 cents. At the deepest levels within our governing structures, we are committed to living beyond our means on a scale no civilization has ever done.
Our most enlightened citizens think it’s rather vulgar and boorish to obsess about debt. The urbane, educated, Western progressive would rather “save the planet,” a cause which offers the grandiose narcissism that, say, reforming Medicare lacks. So, for example, a pipeline delivering Canadian energy from Alberta to Texas is blocked by the president on no grounds whatsoever except that the very thought of it is an aesthetic affront to the moneyed Sierra Club types who infest his fundraisers. The offending energy, of course, does not simply get mothballed in the Canadian attic: The Dominion’s prime minister has already pointed out that they’ll sell it to the Chinese, whose Politburo lacks our exquisitely refined revulsion at economic dynamism, and indeed seems increasingly amused by it. Pace the ecopalyptics, the planet will be just fine: Would it kill you to try saving your country, or state, or municipality? ...
What indeed? In September, the tenth anniversary of a murderous strike at the heart of America’s most glittering city was commemorated at a building site: The Empire State Building was finished in 18 months during a depression, but in the 21st century the global superpower cannot put up two replacement skyscrapers within a decade. The 9/11 memorial museum was supposed to open on the eleventh anniversary, this coming September. On Thursday, Mayor Bloomberg announced that there is “no chance of it being open on time.” No big deal. What’s one more endlessly delayed, inefficient, over-bureaucratized construction project in a sclerotic republic?
Barely had the 9/11 observances ended than America’s gilded if somewhat long-in-the-tooth youth took to the streets of Lower Manhattan to launch “Occupy Wall Street.” The young certainly should be mad about something: After all, it’s their future that got looted to bribe the present. As things stand, they’ll end their days in an impoverished, violent, disease-ridden swamp of dysfunction that would be all but unrecognizable to Americans of the mid–20th century — and, if that’s not reason to take to the streets, what is? Alas, our somnolent youth are also laboring under the misapprehension that advanced Western societies still have somebody to stick it to. The total combined wealth of the Forbes 400 richest Americans is $1.5 trillion. So, if you confiscated the lot, it would barely cover one Obama debt-ceiling increase. Nevertheless, America’s student princes’ main demand was that someone else should pick up the six-figure tab for their leisurely half-decade varsity of Social Justice studies. Lest sticking it to the Man by demanding the Man write them a large check sound insufficiently idealistic, they also wanted a trillion dollars for “ecological restoration.” Hey, why not? What difference is another lousy trill gonna make?
Underneath the patchouli and pneumatic drumming, the starry-eyed young share the same cobwebbed parochial assumptions of permanence as their grandparents: We’re gayer, greener, and groovier, but other than that it’s still 1950 and we’ve got more money than anybody else on the planet, so why get hung up about a few trillion here and a few trillion there? In a mere half century, the richest nation on earth became the brokest nation in history, but the attitudes and assumptions of half the population and 90 percent of the ruling class remain unchanged.
Mark Steyn tells us, describing the recent British riots and looting as the Welfare State’s logical dead end.
Her Majesty’s cowed and craven politically correct constabulary stand around with their riot shields and Robocop gear as young rioters lob concrete through store windows to steal the electronic toys which provide their only non-narcotic or alcoholic amusement. I chanced to be in Piccadilly for the springtime riots when the police failed to stop the mob from smashing the windows of the Ritz and other upscale emporia, so it goes without saying that they wouldn’t lift a finger to protect less-prestigious private property from thugs. Some of whom are as young as 9 years old. And girls.
Yet a police force all but entirely useless when it comes to preventing crime or maintaining public order has time to police everything else. When Sam Brown observed en passant to a mounted policeman on Cornmarket Street in Oxford, “Do you know your horse is gay?”, he was surrounded within minutes by six officers and a fleet of patrol cars, handcuffed, tossed in the slammer overnight, and fined 80 pounds. Mr. Brown’s “homophobic comments,” explained a spokesmoron for Thames Valley Police, were “not only offensive to the policeman and his horse, but any members of the general public in the area.” The zealous crackdown on Sam Brown’s hippohomophobia has not been replicated in the present disturbances. Anyone who has so much as glanced at British policing policy over the past two decades would be hard pressed to argue which party on the streets of London, the thugs or the cops, is more irredeemably stupid.
This is the logical dead end of the Nanny State. When William Beveridge laid out his blueprint for the British welfare regime in 1942, his goal was the “abolition of want” to be accomplished by “co-operation between the State and the individual.” In attempting to insulate the citizenry from life’s vicissitudes, Sir William succeeded beyond his wildest dreams. As I write in my book: “Want has been all but abolished. Today, fewer and fewer Britons want to work, want to marry, want to raise children, want to lead a life of any purpose or dignity.” The United Kingdom has the highest drug use in Europe, the highest incidence of sexually transmitted disease, the highest number of single mothers, the highest abortion rate. Marriage is all but defunct, except for William and Kate, fellow toffs, upscale gays and Muslims. From page 204: “For Americans, the quickest way to understand modern Britain is to look at what LBJ’s Great Society did to the black family and imagine it applied to the general population.”
Peter Hitchens bitterly observes supine ameliorist welfarism reaping its inevitable reward.
Bitter laughter is my main response to the events of the past week. You are surprised by what has happened? Why? I have been saying for years that it was coming, and why it was coming, and what could be done to stop it.
I have said it in books, in articles, over lunch and dinner tables with politicians whose lips curled with lofty contempt.
So yes, I am deeply sorry for the innocent and gentle people who have lost lives, homes, businesses and security. Heaven knows I have argued for years for the measures that might have saved them.
Faced with reality: Left-wingers at last meet the filthy thing they have created, and which they ignored when it did not affect them personally
But I am not really very sorry for the elite liberal Londoners who have suddenly discovered what millions of others have lived with for decades.
The mass criminality in the big cities is merely a speeded-up and concentrated version of life on most large estates [housing projects] – fear, intimidation, cruelty, injustice, savagery towards the vulnerable and the different, a cold sneer turned towards any plea for pity, the awful realisation that when you call for help from the authorities, none will come.
As the polluted flood (it is not a tide; it will not go back down again) of spite, greed and violence washes on to their very doorsteps, well-off and influential Left-wingers at last meet the filthy thing they have created, and which they ignored when it did not affect them personally.
No doubt they will find ways to save themselves. But they will not save the country. Because even now they will not admit that all their ideas are wrong, and that the policies of the past 50 years – the policies they love – have been a terrible mistake. I have heard them in the past few days clinging to their old excuses of non-existent ‘poverty’ and ‘exclusion’.
Take our Prime Minister, who is once again defrauding far too many people. He uses his expensive voice, his expensive clothes, his well-learned tone of public-school command, to give the impression of being an effective and decisive person. But it is all false. He has no real idea of what to do. He thinks the actual solutions to the problem are ‘fascist’. Deep down, he still wants to ‘understand’ the hoodies.
Say to him that naughty children should be smacked at home and caned in school, that the police (and responsible adults) should be free to wallop louts and vandals caught in the act, that the police should return to preventive foot patrols, that prisons should be austere places of hard work, plain food and discipline without TV sets or semi-licit drugs, and that wrongdoers should be sent to them when they first take to crime, not when they are already habitual crooks, and he will throw up his well-tailored arms in horror at your barbarity.
Say to him that divorce should be made very difficult and that the state should be energetically in favour of stable, married families with fathers (and cease forthwith to subsidise families without fathers) and he will smirk patronisingly and regard you as a pitiable lunatic.
Say to him that mass immigration should be stopped and reversed, and that those who refuse any of the huge number of jobs which are then available should be denied benefits of any kind, and he will gibber in shock.
Yet he is ready to authorise the use of water cannon and plastic bullets on our streets (quite useless, as it happens, against this sort of outbreak) as if we were a Third World despotism.
Water cannon and plastic bullets indeed. What an utter admission of failure, that after 50 years of the most lavish welfare state in the solar system, you cannot govern your country without soaking the citizenry in cold water and bombarding them with missiles from a safe distance. Except, of course, that it is because of the welfare system that this is so.
Noemie Emery, in the American Spectator, is a bit too kind, I think, to the creators of the Welfare State, but she correctly identifies the fallacy of promoting wishes into rights. Authentic rights are always take the form “shall not do to you, or shall not stop you.” Legitimate rights are simply negatives commandments to violations of person, property, or liberty. Positive rights are a blank check written on someone else’s account.
The intentions of Democrats are only the best. They want all of the old to have lavish retirements, all of the young to have scholarships, verse-penning cowboys to have festivals funded by government, and everyone to have access to all the best health care, at no cost to himself. In the face of a huge wave of debt swamping all western nations, this is the core of their argument: They want a fair society, and their critics do not; they want to help, and their opponents like to see people suffer; they want a world filled with love and caring, and their opponents want one of callous indifference, in which the helpless must fend for themselves. (“We must reject both extremes, those who say we shouldn’t help the old and the sick and those who say that we should,” quips the New Yorker’s Hendrik Hertzberg.) But in fact, everyone thinks that we “should” do this; the problem, in the face of the debt crisis, is finding a way that we can. It is about the “can” part that the left is now in denial: daintily picking its way through canaries six deep on the floor of the coal mine, and conflating a “good” with a “right.
As the financial burden of the Welfare State is bringing the economies of Europe and the United States to their knees, the Telegraph reports that the results of a British think tank’s investigation of public opinion on the issue of fairness strikes at its moral foundation.
As we report today, Policy Exchange – supposedly the Prime Minister’s favourite ideas outlet – has done a brave and unusual thing. Rather than polling the public just on policy and voting intention, it has put a far more abstract moral issue before them. It instructed the pollsters at YouGov to find out precisely what the public thought the most powerful term of approbation in the political lexicon – “fair” – actually amounted to.
The quite unequivocal reply that was received (with breathtakingly enormous majorities in some forms) came as no surprise to this column. To most voters, fairness does not mean an equal distribution of resources and wealth, or even a redistribution of these things according to need. It means, as the report’s title – “Just Deserts” – implies, that people get what they deserve. And what is deserved, the respondents made clear, refers to that which is achieved by effort, talent or dedication to duty: in other words, earned on merit.
As I have written so often on this page, when ordinary people use the word “fair”, they mean that you should get out of life pretty much what you put in. Or, as the report’s authors put it, “Voters’ idea of fairness is strongly reciprocal – something for something.” By obvious inference, a “something for nothing” society is the opposite of fair. And this view, interestingly, is expressed by Labour voters in pretty much the same proportion as all others.
Imagine that. After all these years of being morally blackmailed by the poverty lobby, harried by socialist ideologues and shouted at by self-serving public sector axe-grinders, the people are not cowed. Even after being bludgeoned by the BBC thought monitors and browbeaten by Left-liberal media academics with the soft Marxist view of a “fair” society – from each according to his abilities, to each according to his needs – they have not bought it. They do not believe that if people are poor, it is necessarily society’s fault, and therefore society’s duty to deal with the consequences.
No, they say, as often as not, poverty is a consequence of lack of effort or self-control – and, therefore, the individual must accept the consequences. And they do not believe that such character failings and their consequences should be disregarded in the apportioning of welfare or help from the state – help which they know is made possible by the efforts of those who do “the right thing”. They still have a firm and undaunted conception of the “undeserving poor” – a term so unfashionable that no politician would be capable of uttering it – and would like such people to be made to accept their reciprocal obligation to society in return for any assistance from public funds.
Megan McArdle quotes her reader Trimalchio’s explanation of why the Left’s Tax-the-Rich rhetoric is fraudulent.
For anyone who wants to discuss the revenue side of the budget debate knowledgably, I highly recommend spending some time with the IRS’s Statistics on Income. Table 1.1 under Individual Statistical Tables is a good place to start: http://www.irs.gov/pub/irs-soi...
You can see, for example, that total taxable income in 2008 was $5,488 billion. Taxable income over $100,000 was $1,582 billion, over $200,000 was $1,185 billion, over $500,000 was $820 billion, over $1 million was $616 billion, over $2 million was $460 billion, over $5 million was $302 billion, and over $10 million was $212 billion. Effective tax rates as a percentage of taxable income seem to top out around 27%.
You can estimate the effects of various proposals in the best case, which is that each percentage point increase in the marginal rate translates to an equal increase in the effective rate. Going back to 2000 (“Clinton era”) marginal rates on income over $200,000, let’s call it a 5 percentage point increase in the marginal rate, would therefore yield $59 billion on a static basis. Going from there to a 45% rate on incomes over $1 million (another 5 percentage point increase) yields an additional $31 billion. Or, instead, on top of 2000 rates over $200,000, 50%/60%/70% on $500,000/$5 million/$10 million? An extra $133 billion, or nearly 1% of GDP. That’s not accounting for the further middle class tax cuts that are usually proposed along with these “millionaires’ taxes.”
Now, compare this to deficits of $1,413 billion in 2009 and $1,293 billion in 2010, and using optimistic White House estimates, $1,645 billion in 2011 $1,101 billion in 2012, $768 billion in 2013, and continuing at over $600 billion after.
Alternatively, you might also notice that while taxable income in 2008 was $5,488 billion, adjusted gross income on all returns was $7,583 billion on taxable returns only (with an additional $680 billion on untaxable returns), which means that $2,095 billion isn’t even in the tax base. $592 billion of that difference is exemptions, which are not tax expenditures, and $1,512 billion is deductions, which are mostly tax expenditures.
My point is just that I don’t see how deficits this large can be closed with income taxes on the rich, even at marginal rates far higher than anything we’ve seen in the post-1986 era. Paying for spending at near-term levels, not even considering entitlement and interest payments that will accelerate a decade out, would have to include meaningful base broadening by eliminating tax expenditures like the mortgage interest deduction or the employer health case deduction, or would have to rely on new taxes like a VAT.
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Even if we outright confiscated the wealth of all of this country’s billionaires, we couldn’t break even for this single year.
The grand total of the combined net worth of every single one of America’s billionaires is roughly $1.3 trillion. It does indeed sound like a “ton of cash” until one considers that the 2011 deficit alone is $1.6 trillion. So, if the government were to simply confiscate the entire net worth of all of America’s billionaires, we’d still be $300 billion short of making up this year’s deficit.
That’s before we even get to dealing with the long-term debt of $14 trillion, which if you’re keeping score at home, is between 10 to 14 times the entire net worth of all of the country’s billionaires, combined.
Federal deficit-spending is impairing economic recovery and posing a grave threat to the future well-being, and even the safety, of Americans. We are looking at the real possibility of losing the dollar as reserve currency as well as the US position of financial and political leadership, and losing even the ability to fund a military capable of sustaining our country’s role as a world power.
If we do not want to condemn the next generations of Americans to a shrinking quality of life in a country which has declined into impotence, obscurity, and despair, we are going to have to make very significant and dramatic political changes.
Rembrandt van Rijn, Belshazzar’s Feast, 1635-8, oil on canvas, National Gallery, London
Essentially, we are seeing today, in both Europe and America, the arrival of the time in which the post-WWII Welfare State is proving financially unsustainable. The theory that the establishment elite could redistribute to the cannaile a sufficient quantity of the wealth produced by the productive sector of society to overcome the inherent disadvantages of sloth, intoxication, and criminality as a life-style, or at least to raise them to the level of the working classes, has proven to be futile, counterproductive, and a dream. The associated theory that labor cartels could successfully employ propaganda, intimidation, and governmental coercive force to deliver upper middle class life-styles permanently to modestly skilled workers has already failed conspicuously.
Communism collapsed a few decades ago, and the lesser gods of the religion of the Left are failing now. If you can’t have a Welfare State and you can’t have Trade Unionism either, it isn’t clear what there remains of an imaginable left-wing agenda.
Yuval Levin, at National Affairs, argues that we have reached a watershed point in domestic policy, arriving at the moment in which it is vitally essential to begin thinking about what the new social order is going to look like, now the Welfare State has been demonstrated to be unsustainable.
All over the developed world, nations are coming to terms with the fact that the social-democratic welfare state is turning out to be untenable. The reason is partly institutional: The administrative state is dismally inefficient and unresponsive, and therefore ill-suited to our age of endless choice and variety. The reason is also partly cultural and moral: The attempt to rescue the citizen from the burdens of responsibility has undermined the family, self-reliance, and self-government. But, in practice, it is above all fiscal: The welfare state has turned out to be unaffordable, dependent as it is upon dubious economics and the demographic model of a bygone era. Sustaining existing programs of social insurance, let alone continuing to build new ones on the social-democratic model, has become increasingly difficult in recent years, and projections for the coming decades paint an impossibly grim and baleful picture. There is simply no way that Europe, Japan, or America can actually go where the economists’ long-term charts now point — to debts that utterly overwhelm their productive capacities, governments that do almost nothing but support the elderly, and economies with no room for dynamism, for growth, or for youth. Some change must come, and so it will.
But fully grasping this reality will not be easy. Our attachment to the social-democratic vision means that we tend to equate its exhaustion with our own exhaustion, and so to fall into a most un-American melancholy. On the left, fear of decline is now answered only with false hope that the dream may yet be saved through clever tinkering at the edges. On the right, the coming collapse of the liberal welfare state brings calls for austerity — for less of the same — which only highlight the degree to which conservatives, too, are stuck in the social-democratic mindset.
The fact is that we do not face a choice between the liberal welfare state on one hand and austerity on the other. Those are two sides of the same coin: Austerity and decline are what will come if we do not reform the welfare state. The choice we face is between that combination and a different approach to balancing our society’s deepest aspirations. America still has a little time to find such an alternative. Our moment of reckoning is coming, but it is not yet here. We have perhaps a decade in which to avert it and to foster again the preconditions for growth and opportunity without forcing a great disruption in the lives of millions, if we start now.
But we do not yet know quite how. The answer will not come from the left, which is far too committed to the old vision to accept its fate and contemplate alternatives. It must therefore emerge from the right. Conservatives must produce not only arguments against the liberal welfare state but also a different vision, a different answer to the question of how we might balance our aspirations. It must be a vision that emphasizes the pursuit of economic growth, republican virtues, and social mobility over economic security, value-neutral welfare, and material equality; that redefines the safety net as a means of making the poor more independent rather than making the middle class less so; and that translates these ideals into institutional forms that suit our modern, dynamic society.
Government payouts—including Social Security, Medicare and unemployment insurance—make up more than a third of total wages and salaries of the U.S. population, a record figure that will only increase if action isn’t taken before the majority of Baby Boomers enter retirement.
Even as the economy has recovered, social welfare benefits make up 35 percent of wages and salaries this year, up from 21 percent in 2000 and 10 percent in 1960, according to TrimTabs Investment Research using Bureau of Economic Analysis data.
And Henry Blodget has produced a graphic illustration to illustrate his contention.
[H]ere’s the one chart you need to see to understand why the US is screwed.
This is the “income statement” of the United States in 2010. “Revenue” is on the left. “Expenses” are on the right.
Note a few things…
First, “Revenue” is tiny relative to “Expenses.”
Second, most of the expense is entitlement programs, not defense, education, or any of the other line items that most budget crusaders normally howl about.
Third, as horrifying as these charts are, they don’t even show the trends of these two pies: The “expense” pie is growing like gangbusters, driven by the explosive growth of the entitlement programs that no one in government even has the balls to talk about. “Revenue” is barely growing at all.
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I’d put it another way.
I’d say that Liberalism and the post-New Deal American Welfare State is screwed.
The accident of the chickens finally coming home to roost from decades-old federal housing policies during the waning weeks of an increasingly unpopular Republican Administration delivered both elected branches of government into the hands of left-wing democrats eager to expand the empire of statism.
Those kinds of democrats do not understand economics and are not prudent and responsible managers. Their response to the economic crisis was to apply traditional liberal pump-priming excuses to enact a massive Stimulus package and to nationalize some automakers and bail out more banks, while driving full steam ahead on creating another new cyclopean entitlement system.
The result is a kind of show-and-tell demonstration, in front of God and everybody, making it perfectly clear to everyone whose intellect is not paralyzed by ideology that what conservatives had been saying all along is perfectly true. Social Security is a Ponzi scheme, and was always destined to fail one fine day when demographics failed to cooperate. That there are limits to the percentage of the national economy which can be taxed and redistributed without drastic costs in growth and prosperity. That there are limits to how much government you can have, how much government can do, how many departments and programs you can create, and how many bureaucrats you can hire.
The music has stopped. The era of the expansion of socialism, regulation, and federal authority is over. We have run out of money. National bankruptcy is within sight. The end of government’s capacity to pay for the entitlement system existing prior to Obamacare is at hand. Obamacare is a dream and a delusion which we could never afford. Our domestic experiment in social welfarism has failed.
The American people are gradually awakening from a troubled sleep. A political avalanche is building which is going to sweep Barack Obama, Harry Reid, and Nancy Pelosi, liberalism and the America left, and the whole New Deal/Great Society philosophy from the national political landscape onto the rubbish heap of history.
Neil Reynolds comments on the financial collapse of the European welfare state.
Democracies produced Nazi Germany and Fascist Italy, fulfilling the expectation of Socrates and Machiavelli that democracies end in tyranny. Now democracies are fulfilling the complementary expectation of Nobel laureate economist Milton Friedman that democracies end in bankruptcy. Put a democracy in charge of the Sahara, Mr. Friedman once said, and sand itself will become scarce. Democracies are indeed profligate trustees – or have been for the past 30 or 40 years. Mr. Friedman’s primary fret, though, was the tendency of democracy to centralize political and economic power in the same hands. Most critiques of democracy reflect this elemental distrust. “Democracy is two wolves and a lamb,” Benjamin Franklin reputedly said, “voting on what to have for lunch.”
CNS reports on just how inclusive the federal safety net has become.
According to the Government Accountability Office (GAO), the federal government helped pay the home air conditioning bills for more than 11,000 dead people, 1,100 federal employees, and 725 convicts in fiscal year 2009.
The payments were made by a $5 billion program known as the Low-Income Home Energy Assistance Program (LIHEAP). LIHEAP is designed to provide federal assistance, administered by the states, to help people pay the energy bills to heat their homes in the winter and cool them in the summer. The funds are disbursed by the Department of Health and Human Services and are distributed based on a formula that takes into account a state’s weather and the size of its low-income population.
The GAO examined the LIHEAP programs in seven states: Virginia, Maryland, Ohio, New York, Illinois, Michigan, and New Jersey. The agency found evidence of fraud in each state.
“Our analysis of LIHEAP data revealed that the program is at risk of fraud and providing improper benefits in all seven of our selected states,” reported the GAO. “About 260,000 applications—9 percent of households receiving benefits in the selected states—contained invalid identity information, such as Social Security numbers, names, or dates of birth.”
Most glaring among the problems the GAO found were the pervasive payment of LIHEAP benefits to dead people, some of whom, records show, had been dead for quite a long time.
