Congressional minority report: "The Costs of Corruption to the American Economy"

[KingOrfeo]

Congressional minority report: "The Costs of Corruption to the American Economy"

And, of course, it's about Trump.

Unfair advantages for firms and executives with political connections at the expense of more productive and innovative firms stifles innovation and constrains the American economy. Indeed, some business owners are already claiming that President Trump’s ongoing businesses connections and leverage of the Office of the President are creating an unfair competitive advantage that hurts their business.22 The owner of a restaurant competing with that of the President said, “We feel that the president of the United States, owning a hotel, owning restaurants, promoting those restaurants, is unfair and to the detriment of other businesses in the city.”23 When the President cashes in on his position, and creates an environment in which others do the same, he threatens the efficiency and productivity of the American economy.

Slower Economic Growth

Researchers consistently find that the costs of increased levels of corruption are large.24 Based on estimates in a study from the 1990s, if the United States government had been as corrupt as Italy’s, per capita GDP would have grown at 2.1 percentage points less every year.25 This has huge implications for Americans: if GDP per capita had grown 2.1 percentage points less in 2016, output would have fallen by $1,170 per person. 26 Higher corruption is associated with higherinequality, which is associated with lower growth.27 These aggregate effects on the economy
operate through a diverse array of channels, discussed below, ultimately hurting the country’s economic potential and constrain the productivity growth that translates into higher standards of living for all Americans.

Less competition, productivity, and innovation

Surreptitiously directing business in one way or another skews fair competition in the marketplace, enticing companies to spend money on cultivating political patronage rather than on innovating. Political connections can transfer profits from more productive to less productive firms, decreasing overall productivity.28 Indeed, if seeking favors becomes more profitable than coming up with the next big innovation, then we can expect to see fewer innovations as businesses concentrate on currying favor instead of innovating.29 Corruption also can hurt competition, which is a driver of productivity growth and innovation.30 Americans would see fewer positive innovations and lower productivity, resulting in real effects that reverberate through American households.

Costlier and less effective government

More corrupt governments are also more expensive for their citizens. Firms with political connections are more likely to attempt to evade taxes, as they are less likely to face an audit than non-politically connected firms.31 Municipal bonds can become more expensive in more corrupt governments, increasing the cost of governing.32 Decreased tax revenue and increased costs of borrowing are even more problematic because more corruption leads to increases in public debt as the government increases its spending.33 Corruption can also decrease the effectiveness of regulation by allowing businesses to avoid compliance.34 Corrupt practices undermine government regulations and anti-trust practices that are put into place to correct market failures.35 For example, firms with more political connections may be more likely to violate regulations and shirk responsibility for behaviors that might otherwise invite civil or criminal penalties. Moreover, corruption leads connected firms to leverage their political relationships to secure laws and regulations that help amass and protect their market power at the expense of other businesses, workers, and consumers.

Lower private investment

Private investment—when companies spend money to expand and enhance their equipment and workforce, or to research or develop new innovations—is an important driver of productivity growth. Corruption discourages private investment partly by increasing the costs of investment.36 In a world where the most productive firms are not the most profitable, the traditional investment incentive mechanisms fail to work.

 

[water505]

It's the weekend, Buckwheat.

You need to scrounge up some pussy to take your mind off Lit.

 

[Hard_Rom]

It's Thursday!

 

[james_1957]

Sen. Martin Heinrich apologizes for travel expenses.

And, of course, it's about Trump.

Let's see...

The report is presented by Ranking Member Senator Martin Heinrich (D-N.M.) & is written by Democratic Staff of the Joint Economic Committee.

Martin Heinrich...where have I heard that name before?

ALBUQUERQUE, N.M. (AP) - U.S. Sen. Martin Heinrich has repaid the federal government for reimbursements he received over a two-year period for personal taxi and ride-booking costs.

The New Mexico Democrat’s office conducted a review of its records after USA Today (http://usat.ly/1aDCgdW ) came across a long series of small-dollar transactions for travel reimbursement as part of a review of Senate expenses.

Questions were raised about whether Heinrich was being repaid for personal commuting. Senate rules prohibit lawmakers from being reimbursed for their own commute from home to work, or for other personal trips.

http://www.washingtontimes.com/news/2015/apr/17/heinrich-reimburses-feds-for-travel-expenses/

 

[KingOrfeo]

Let's see...

The report is presented by Ranking Member Senator Martin Heinrich (D-N.M.) & is written by Democratic Staff of the Joint Economic Committee.

Martin Heinrich...where have I heard that name before?


http://www.washingtontimes.com/news/2015/apr/17/heinrich-reimburses-feds-for-travel-expenses/

What's that got to do with this?

 

[cowslinger64]

It's the weekend, Buckwheat.

You need to scrounge up some pussy to take your mind off Lit.

Do you even remember what pussy looks like? And I don't mean the pussy you see in the mirror.

 

[KingOrfeo]

It's the weekend, Buckwheat.

You need to scrounge up some pussy to take your mind off Lit.

I don't see you taking the weekends off from posting.

 

[phrodeau]

It's the weekend, Buckwheat.

You need to scrounge up some pussy to take your mind off Lit.

Only Muslims consider Thursday evening the weekend. Guess that shows us what you are.

 

[Hard_Rom]

Do you even remember what pussy looks like? And I don't mean the pussy you see in the mirror.

You're assuming he has even seen a real pussy besides the one in the mirror.

 

[OldJourno]

Didn't read all the way through. Is there any mention of the billions scammed annually from taxpayers due to fraudulent payments of Social Security, Medicare and Medicaid benefits? For food stamps? Welfare? Section 8?

 

[water505]

I don't see you taking the weekends off from posting.

I don't see you ever stopping. Maybe this place is like pussy for you.

Not that there's anything wrong with that

 

[KingOrfeo]

Didn't read all the way through. Is there any mention of the billions scammed annually from taxpayers due to fraudulent payments of Social Security, Medicare and Medicaid benefits? For food stamps? Welfare? Section 8?

Cite for those billions?

 

[james_1957]

Reducing Government-wide improper payments

From the U.S. Government Accountability Office...

Improper payments have consistently been a government-wide issue despite efforts to identify their root causes and reduce them. Examples of past improper payments include erroneous payments made by (1) the Department of Agriculture’s National School Lunch program due to verification and authentication errors, including inadequate documentation and fraud or misrepresentation by participants; (2) the Department of Labor’s Unemployment Insurance program due to eligibility errors in handling separation issues, and claimants who have returned to work and continue to claim benefits; and (3) the Department of Health and Human Services’ Medicare Fee-for-Service program due to medically unnecessary services and insufficient documentation.

The government’s ability to understand the scope of the issue is hindered by incomplete, unreliable, or understated estimates; risk assessments that may not accurately assess the risk of improper payment; and noncompliance with criteria listed in federal law. GAO has reported improper payments as a material weakness in internal control in its reports on the U.S. government’s consolidated financial statements.

Since fiscal year 2003—when certain agencies were required by statute to begin reporting improper payments—cumulative improper payment estimates have totaled over $1 trillion. The improper payment estimate in fiscal year 2015, attributable to 121 programs across 22 agencies, was $136.7 billion, up from $124.6 billion in fiscal year 2014. The $12 billion increase was primarily due to estimated improper payments for the Medicaid program. As shown in the figure, the Medicare, Medicaid, and Earned Income Tax Credit programs account for over 76 percent of the government-wide improper payment estimate. Federal spending for Medicare and Medicaid is expected to significantly increase, so it is critical to take actions to reduce improper payments in these programs.

http://www.gao.gov/key_issues/reducing_government-wide_improper_payments/issue_summary

 

[KingOrfeo]

From the U.S. Government Accountability Office...


http://www.gao.gov/key_issues/reducing_government-wide_improper_payments/issue_summary

I don't see anything there about fraud by recipients of public assistance, only administrative errors by those cutting the checks.

 

[KingOrfeo]

From the U.S. Government Accountability Office...


http://www.gao.gov/key_issues/reducing_government-wide_improper_payments/issue_summary

Apart from the returned-to-work thing I don't see anything there about fraud by recipients of public assistance, only administrative errors by those cutting the checks. Why would a patient commit Medicare fraud? The doctor does the billing anyway.

 

[james_1957]

I don't see anything there about fraud by recipients of public assistance, only administrative errors by those cutting the checks.

Improper payments have consistently been a government-wide issue despite efforts to identify their root causes and reduce them. Examples of past improper payments include erroneous payments made by (1) the Department of Agriculture’s National School Lunch program due to verification and authentication errors, including inadequate documentation and fraud or misrepresentation by participants; (2) the Department of Labor’s Unemployment Insurance program due to eligibility errors in handling separation issues, and claimants who have returned to work and continue to claim benefits; and (3) the Department of Health and Human Services’ Medicare Fee-for-Service program due to medically unnecessary services and insufficient documentation.

The government’s ability to understand the scope of the issue is hindered by incomplete, unreliable, or understated estimates; risk assessments that may not accurately assess the risk of improper payment; and noncompliance with criteria listed in federal law. GAO has reported improper payments as a material weakness in internal control in its reports on the U.S. government’s consolidated financial statements.

Since fiscal year 2003—when certain agencies were required by statute to begin reporting improper payments—cumulative improper payment estimates have totaled over $1 trillion. The improper payment estimate in fiscal year 2015, attributable to 121 programs across 22 agencies, was $136.7 billion, up from $124.6 billion in fiscal year 2014. The $12 billion increase was primarily due to estimated improper payments for the Medicaid program. As shown in the figure, the Medicare, Medicaid, and Earned Income Tax Credit programs account for over 76 percent of the government-wide improper payment estimate. Federal spending for Medicare and Medicaid is expected to significantly increase, so it is critical to take actions to reduce improper payments in these programs.

A trillion dollars in administrative errors?

 

[james_1957]

Fraud

Apart from the returned-to-work thing I don't see anything there about fraud by recipients of public assistance, only administrative errors by those cutting the checks. Why would a patient commit Medicare fraud? The doctor does the billing anyway.

IRS estimates that between 21 percent to 26 percent of EITC claims are paid in error. Some of the errors are unintentional caused by the complexity of the law, but some of the claims are intentional disregard of the law..

https://www.eitc.irs.gov/Tax-Preparer-Toolkit/faqs/fraud

 

[james_1957]

Apart from the returned-to-work thing I don't see anything there about fraud by recipients of public assistance, only administrative errors by those cutting the checks. Why would a patient commit Medicare fraud? The doctor does the billing anyway.

Types of Medicare fraud

1.Phantom billing: The medical provider bills Medicare for unnecessary procedures, or procedures that are never performed; for unnecessary medical tests or tests never performed; for unnecessary equipment; or equipment that is billed as new but is, in fact, used.

2.Patient billing: A patient who is in on the scam provides his or her Medicare number in exchange for kickbacks. The provider bills Medicare for any reason and the patient is told to admit that he or she indeed received the medical treatment.

3.Upcoding scheme and unbundling: Inflating bills by using a billing code that indicates the patient needs expensive procedures

https://en.wikipedia.org/wiki/Medicare_fraud

 

[james_1957]

Welfare Fraud

Apart from the returned-to-work thing I don't see anything there about fraud by recipients of public assistance, only administrative errors by those cutting the checks. Why would a patient commit Medicare fraud? The doctor does the billing anyway.

Improper welfare payments, including fraud, are estimated to be 10.1% of all federal welfare payments made and totaled $71.5 billion in fiscal year 2015. This estimate is based on reports from the Office of Management and Budget (OMB) , The General Accounting Office (GAO) [ii], and other federal agencies. Seven of the Welfare Programs make the OMB list of the top thirteen federal programs estimated to be “high error programs” - programs with improper payments greater than $750 million annually. These are highlighted below by individual program.

Total welfare improper payments and fraud of $71.5 billion is an enormous sum greater than the entire budgets of TANF, Child Nutrition, Head Start, Job Training, WIC, Child Care, LIHEAP and the Lifeline programs, combined. Explanations by OMB and GAO of the causes of improper payments are shown below by welfare program. In general, the high level of improper payments comes from the complexity and uniqueness of income qualifications in multiple welfare programs, the reliance on users for income qualification information and the inability of multiple agencies to adequately verify user information and adhere to standards and rules.

Improper Payment Definition

Improper payments are described this way by the OMB:

“ ‘Improper payments’ occur when:

•funds go to the wrong recipient;

•the right recipient receives the incorrect amount of funds (including over payments and underpayments);

•documentation is not available to support a payment; or

•the recipient uses funds in an improper manner.

Although not all improper payments are fraud, and not all improper payments represent a loss to the government, all improper payments degrade the integrity of government programs and compromise citizens’ trust in government.”

http://federalsafetynet.com/welfare-fraud.html

 

[james_1957]

I don't see anything there about fraud by recipients of public assistance, only administrative errors by those cutting the checks.

Keep pedaling, KO.

The harder you fight on behalf of the welfare cheats, the greater the case you make for government incompetence.