Fraud in the US Federal Government

Here is a bit from a posting by John Mauldin on The Big Picture blog that points out that the federal government (under Obama, not just the idiot Bush administration) is dabbling in fraud:

Speaking of deflation, let me mention something I find totally outrageous. Normally, I actually take up for the bureaucrats who are stuck with the task of trying to monitor inflation. It is a tough job, and like Monday-morning quarterbacks, everybody thinks you should have done it differently. I can understand the rationale for hedonic measurements, housing rent equivalents, etc., even if I don’t agree with them. You have to set some rules and live with them. But the latest imbroglio is disgraceful.

It seems the US Bureau of Labor Statistics, in the CPI next week, will treat the subsidy received by those 800,000 car buyers who bought a car in the “Cash for Clunkers” program as if the price of a car fell by $4,500. Really? My tax dollars account for nothing?

This does several things. It will decrease the inflation used to adjust the GDP for this quarter. Not the end of the world, but annoying But what really matters is that the CPI is used to calculate Social Security increases and interest paid on TIPS.

If I tried to defraud one of my clients using such accounting legerdemain, I would be shut down, sued, and taken to court (at the minimum) by the host of regulators who look over my shoulder. And I should be! You don’t make such changes in the rules to your own benefit. But that is what the BLS did. This policy should be overruled immediately. There are enough deflationary forces in the world without having to artificially create some more.

It is little things like this that destroy credibility. The Obama administration should immediately jump on this and correct it. But a little voice inside my head says that was not an "accident" and that nobody in the Obama administration is going to "notice" this fraud and correct it.

This kind of corruption was rampant in the Bush administration, but naive idealist that I am, I thought it would not be carried over into the Obama administration. Let's just say I go through life being constantly disheartened. An idealist carries a weighty burden that grows ever heavier as age makes a person realize, yet again, there is corruption everywhere. The guys who got on top didn't do it all by dint of special talent or effort. There's a lot of corruption out there. And corruption sinks cultures. It is like carrying a load of parasites. You can carry only so much before you are overwhelmed and collapse.