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Opinion: After $100 billion in pandemic fraud, is government distrust justified?

Pandemic relief money was treated so loosely that prosecutors may never catch all the cheaters. And now we have an Inflation Reduction Act most Americans believe won’t reduce inflation

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A “For Rent” sign is shown at a retail property in Chicago during the early days of the pandemic in 2020.

A “Store For Rent” sign is displayed at a retail property in Chicago, on June 20, 2020. A pandemic relief program overseen by the U.S. Small Business Administration was one target of a recent congressional hearing to examine the fraud that bedeviled many of the federal COVID-19 relief programs.

Nam Y. Huh, Associated Press

The New York Times calls it “one of the largest frauds in American history.” Indeed, it would be harder to find one responsible for stealing more of your tax money.

Beginning with the Trump administration and lasting through the first part of the Biden administration, Congress passed three separate stimulus relief packages in an effort to help people and businesses affected by the COVID-19 pandemic, totaling about $5 trillion in various loans and grants. But many of these programs involved handing out massive amounts of money on little more than the honor system, with little, if any, oversight. A lot of Americans apparently were absent on the day their schools taught lessons on honor.

As the Times described it, Uncle Sam gave money to people in prison, to people specifically labeled on government roles as on a “do not pay list,” to people who called their front yards “farms,” and to people both imaginary and dead. 

One brazen Postal Service worker got $82,900 for a business he called “U.S. Postal Services.” Someone else used the email address of a burrito shop to obtain 10 loans for a fake bathroom renovation company. One person got expanded unemployment benefit checks from 29 separate states, taking advantage of how states were assigned to administer that handout. 

The list goes on. The Times said no one knows the total, although estimates exceed $100 billion in relief money diverted fraudulently

Much has been made in recent years about the dwindling trust Americans have in their government. Pew Research Center, which has been tracking this for more than 60 years, found last May that only 2% of survey respondents said they trust the federal government to do what is right “just about always,” while only 19% trusted it to do so “most of the time.” 

In 1964, 77% thought Washington did what was right most of the time.

Were people too naive back then? What about today?

Certainly, much of our modern mistrust is the product of naive and bitter partisanship. Pew has also found that, since Joe Biden became president, only 9% of Republicans or Republican-leaning independents trust the government, as opposed to 36% of Democrats. But the numbers were almost exactly the opposite when Donald Trump was president. Some people automatically despise those who wear the colors of the opposite party and are happy to invent reasons for it. 

And despite overwhelming evidence, about 32% of Republicans and Trump voters still believe the 2020 election was counted wrong, according to the Center for Election Innovation & Research.

So, yes, there is a bit of blind distrust toward institutions and political figures. But it would be foolish to discount the role politicians, federal and state governments have played in this, as well. You hardly need to invent reasons to distrust when the government plays fast and loose with your money.

Or when politicians label major legislation as something misleading.

On Tuesday, Biden signed the massive bill that has been labeled the Inflation Reduction Act. It does a lot of things, such as establishing an alternative minimum tax for corporations, pouring money into green energy, protecting forest lands, allowing the government to negotiate cheaper drug prices under Medicare and hiring tens of thousands of new IRS agents

But reducing inflation? That may be the biggest thing on the minds of voters these days, but this bill isn’t likely to do much about it. 

A letter signed by more than 200 economists said it is “a misleading label applied to a bill that would likely achieve the exact opposite effect.”

Regular Americans aren’t buying it, either. A recent poll by The Economist and Yougov.com found only 12% believing the bill will reduce inflation, while 36% said it would increase it, instead. The Philadelphia Inquirer urged readers to “gird your loins.” 

“The euphemistic name belies the high price we are going to pay for a likely political panacea rather than a policy solution,” the paper’s editorial board said. 

Getting back to the pandemic stimulus money, The New York Times quoted officials saying it may take a decade for prosecutors to catch up to those who stole relief funds. Only 500 investigators in the offices of 21 inspectors general are working on what could be millions of criminal cases. 

As a percentage, $100 billion isn’t much when compared to $5 trillion in aid, most of which kept millions of Americans going during a time when they were unable to make money, through no fault of their own.

But, of course, $100 billion is not a small amount, and letting it carelessly drop like excess bread crumbs in a duck pond is not worth the cynicism and distrust it helped purchase.