The Stupidity of Zero-Tolerance Policies on Food Stamps and Welfare

Jacob Levy has a great post on the stupidity, cruelty, and inefficiency in cracking down on food stamp and welfare fraud.

A lot of people a lot of the time underestimate how burdensome, onerous, and intrusive complicated bureaucratic rules and regulations are. They casually treat the only cost of a rule as the cost to bad people of not doing whatever the rule prohibits, which isn’t a cost at all. But in order to have effect, rules have to be enforced; efforts have to be made to detect violations and monitor performance on an ongoing basis. This is a burden on the whole class subject to the rule, not only those who were going to break it. They have to devote themselves, at some margin, not to the thing they’re actually trying to do, but to proving that they’re not doing it in the prohibited way. They have to prove it through paperwork, which either they’re inexpert in compared to the official reviewing it or they have to (expensively) hire professionals to handle; and even people who had no intention of violating the underlying rule are put in perpetual jeopardy of wrongdoing-by-paperwork-mistake. They have to prove it in person to the various spot inspectors, administrative auditors, and other bureaucrats put in charge of monitoring and detection; and even people who had no intention of violating the underlying rule are made to feel like perpetual suspects or distrusted children instead of honest trustworthy adults.

The whole thing is great.

 

10 Thoughts on “The Stupidity of Zero-Tolerance Policies on Food Stamps and Welfare

  1. This is somewhat hilarious since it sounds just like the complaints of ALEKS style folks about business regulation. Or on guns. I’ve been following the Stradivarius story and what struck home is that they tracked down the violin because the taser used could be tracked. I guess if they’d just used a gun, they could have gotten away?

    BTW, my take is that we have to consider te cost of bureaucratic regulations for everything, welfare and disability and schools and banks and cars and drugs and food.

  2. cranberry on February 7, 2014 at 11:36 am said:

    Computerized systems can be used to catch fraud. Paying benefits to dead people for decades cannot be tolerated.

    A small percentage of a really big number is also a big number.

    http://www.masslive.com/politics/index.ssf/2013/06/state_auditor_suzanne_bump_mas.html
    http://www.masslive.com/business-news/index.ssf/2013/05/audit_finds_widespread_ebt_abuse_includi.html

  3. What get really creepy is when somebody hides the body to keep the SS checks coming.

  4. Yes, it’s a cost benefit analysis, with the recognition that the cost is not just in money but also in undermining the goals you are trying to reach (in the case of food stamps, feeding people, in the case of cars letting people buy the cars they want at a price they can afford, . . . .)

    I think a lot of tracking regulatory methods (say, of SNAP cards or guns) have have the potential to address fraud and crimes. I think they can be fairly transparent (and not difficult to follow) and effective (not the least because they allow the people to get the services — say the children whose parents might otherwise desire to trade their SNAP cards for drugs — that we want them to get). We do need to couple the tracking with some safeguards of privacy, but I do think they can be cost-effective.

    Checking bus tickets electronically in India has had a significant effect on stabilizing the system (and defeating bribery based fraud). Checking the logs of teachers in rural schools (to see that they are actually coming to work) has been so effective that it’s becoming a political issue.

    On the other hand, I’m guessing that the hiding actual bodies is a rare enough event that it’s not a fraud we should work hard to guard against.

    (The link shows about 3 M in fraud for 1.5 B in services — 0.2%; the army recruiting scandal looks like 30M in fraud for about 300M in payments, 10%. I think any payment that’s <1% fraud shouldn't be titled "audit finds widespread abuse". 10% is getting there, though).

  5. Apparently there’s a very widespread body-hiding epidemic in Japan. It turns out that, like, 90% of centegenarians in Japan died about 20 years ago.

    http://www.nytimes.com/2010/08/15/world/asia/15japan.html?_r=0

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