Waste, Fraud, and Abuse is a Big Deal (or, Want to Buy a Football Team or Eight?)

It is easy sometimes to dismiss the “waste, fraud, and abuse” argument that some limited government folks make when we talk about ways we can quickly bring the size of our government under control. The amount of “WF&A” involved in the Federal government is a relatively small part of the budget — usually less than ten percent. Ten percent of our total budget is about $380 billion. In the grand scheme of things — when we’re talking about a $14 trillion to $16 trillion dollar debt — it’s not very large at all.

But let’s not move so quickly here. While ten percent seems like small potatoes, none of us would shrug if we ran a company that frittered away ten percent of its revenues every month. If we found that we lost ten percent of our household budgets to theft and frivolities we knew nothing about and didn’t approve, we would be livid, and rightly so. Big numbers can dizzy us; I know I lose perspective when I think in numbers larger than ten million or so. I start to think in terms of percentages: this big number is X percent of that other big number.

That doesn’t work well, because percentages don’t really tell us about the raw power behind the numbers. We have to look at the numbers a little differently; put them in a world we recognize so that we can make sense of their enormity. Let me give you an example. The Wall Street Journal recently reported that over the past three years, state unemployment programs erroneously paid out $19 billion in benefits — cash that went to people who should not have gotten it. We won’t see that money again. It’s gone. But it’s only a little more than ten percent of the $180 billion total the states paid out over that period of time. Ten percent is peanuts, right? That’s the conventional wisdom and, for the most part, we accept it. Besides, it’s hard to imagine how large $19 billion really is. Most of us won’t get to deal with even a fraction of that amount in our lives.

So let’s create a little thought experiment to break it into bits we can handle. Forbes publishes a list of the most valuable sports franchises every year. Their ranking covers every sport from football to baseball to auto racing. Now, we all know roughly how expensive a professional sports franchise is. It takes a special level of wealth to pick up a National Football League team or a Permiere League soccer franchise. I went down the Forbes list and totaled up the values, to see how far our $19 billion would get us. I even added an extra five percent pad per team, you know, to sweeten the pot. We can afford to be generous to make sure the sale goes through, right?

So, how many franchises do you think we could buy? Three? Four? Six?

Try twelve. Here’s the list of our brand-new teams.

  1. Manchester United (soccer) – $1.86 billion
  2. Dallas Cowboys (NFL) – $1.81 billion
  3. New York Yankees (MLB) – $1.7 billion
  4. Washington Redskins (NFL) – $1.55 billion
  5. Real Madrid (soccer) – $1.45 billion
  6. New England Patriots (NFL) – $1.37 billion
  7. Arsenal (soccer) – $1.19 billion
  8. New York Giants (NFL) – $1.18 billion
  9. Houston Texans (NFL) – $1.17 billion
  10. New York Jets (NFL) – $1.17 billion
  11. Philadelphia Eagles (NFL) – $1.12 billion
  12. Baltimore Ravens (NFL) – $1.07 billion

With the five percent pad, those teams add up to $18.88 billion dollars. We would still have $120 million left over, which means the bratwurst is on us when we go to all those tailgate parties.

That is what waste, fraud, and abuse really means. Our governments fritter away enough money to buy major companies every single year.

Now let me give you an even larger number. According to the best estimate by the National Health Care Anti-Fraud Association, we lose $60 billion every year from Medicare and Medicaid. Not $19 billion, but $60 billion, and not over three years, but every single year. What might that buy us? This time, let’s not look at professional sports. Let’s shoot for the stars.

The Congressional Budget Office issued a report in 2004 that showed that the cost of the Apollo program, the program that sent people to walk on the moon six times, would cost $170 billion in 2005 dollars. Ah! Now there’s something we could buy! Let’s take that $60 billion that just leaks out of Medicare and Medicaid, save it up for three years, and put a few people on the moon!

That is a big deal. And that $60 billion, as it happens, is about ten percent of the budget of those two programs. It makes you wonder what else we could do with the hundreds of billions of dollars of our money the government is tossing down the storm drain, doesn’t it?

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